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News Updates - 16 January 2001 India more competitive than China KOLKATA: India Inc has been able to show its mettle as it has moved up in the global competitiveness ranking, leaving China behind, as per the Global Competitiveness Report 2000, released recently by the World Economic Forum and the Harvard University. The study, conducted jointly by noted economists from index ranking, says India's position has risen from 42 in 1999 to 37 in 2000 while China's ranking was 44 last year. Singapore ranks number one followed by the USA. The CCI (index), the report says, is being used to gauge the growth potential of a country. The index aims to identify the factors responsible for raising productivity and current economic performance as measured by the rise in the level of gross domestic product per person. The report describes `competitiveness' as "set of institutions and economic policies supportive of high rates of growth in the medium term." The CCI had been built on the microeconomic competitiveness index, which primarily reflects upon two things -- the ability to comprehend technological and managerial skills and the country's business environment. The technology transfer index of India is 0.32 as compared to minus 0.35 for China. The report says the technology transfer index is relevant for a developing country as it reflects the nation's participation in newest technologies, which increases the GDP of the concerned country. The economic creativity index, which had been constructed to bring together the three aspects of innovation, technology transfer and diffusion, is minus 0.03 for India, while it is minus 0.56 for China. The report says that economic creativity index can be justified empirically and it is also correlated with the economic growth of a nation. The list of additional factors included savings and investment rates, measures of institutional quality and the rule of law, measures of financial depth, ethnic diversity, measures of economic crises and the level of GDP per capita. On the broad macroeconomic fronts, the competitiveness report also placed India on a higher plane than China in respect of recessionary expectations and exchange rate stability. On the aspect of bank solvency, the report says India' banking system is far healthy and sound compared to Chinese. The competitiveness report also says that India's exchange rate properly reflects the fundamentals of the country. The country's short-term liabilities to international reserves, however, are slightly higher at 0.27 compared to China's 0.12.
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