India And China Compete For Dominance In The Global South As Trade Dynamics Shift

The Modi government aims to lead the Global South. Prime Minister Narendra Modi and External Affairs Minister S. Jaishankar have often stated this goal. However, China also wants to lead the Global South and has increased its exports to these nations.

China's trade with the Global South has seen a significant rise. In May, China's exports to these nations jumped by 11.2%, compared to 7.6% in May last year. This increase suggests China might achieve its target of 5% growth in 2023.

While China's exports to developed markets have slowed, trade with ASEAN nations and Brazil has grown. Western countries have reduced their intake of Chinese goods, but China has still performed well in the Global South.

Data shows that Global South nations have imported low-cost electric cars, solar panels, and steel from China. China has also focused on boosting telecom infrastructure in these regions.

Despite US and Western sanctions, China has sold many goods in Brazil. During the COVID crisis, Chinese electronics surged in Western markets but have now returned to pre-2018-19 levels.

China has found ways to bypass the 25% tariff imposed by the Trump administration by routing products through Vietnam. This makes the tariff ineffective and allows China to continue exporting to the US.

China's property sector shows some signs of recovery, and electric vehicles are gaining popularity in the domestic market. Experts believe that while full recovery in the property sector is unlikely, China might still achieve its 5% growth target.

Last week, the IMF revised China's 2023 growth forecast from 4.6% to 5%, boosting China's hopes for economic growth.