Economic Indicators

Economic Indicators
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Abstract
This paper is an empirical evaluation of economic indicators as published in Huffman post in an article titled “why China and India are growing so fast? State investment” The article focuses of GDP as the economic indicators for economic development for China and India. Two important aspects that determine how fast the economies of these countries have grown is a specific reference to state investment and private investment. The paper uses data and information as presented in the article which quotes statistics and analysis of the International Monitory Funds. The paper follows the guideline of the rubric provided. The introduction helps to present the title of the article and why it is important for this work. The summary section provides the highlights of data which proves that indeed China and India have escalated their economic growth rates. The discussion section highlights the importance of this article and topic as large to my study and understanding the economic mechanism in the market. To support the summary and discussion, graphical analysis is done from IMF to show the growth rate in GDP per capita. Finally, the paper discusses the lessons and knowledge acquired from this activity. This section also gives the factors that have facilitated to this growth as well as those facets that could be affected if any of these contributors are changed.
Introduction
The Huffington Post does a series of economic post evaluating the economic growth rate among different countries in the world.

An article by John Rose was focused on answering the question as to why China and India are ranked the fastest growing economies in the world. According to Beijing times, the two major fastest growing economies are India and China (Lan, 2017). The two countries have portrayed a common pattern in development that is different from the west economic growth rate. State investment acts as a major boost to the economic expansion of these countries. However, private investment is on the verge of declining. Therefore, “why China and India are growing so fast? State investment” is a special article of interest from the perspective of GDP as focused in this paper.
Summary of the article
According to Ross (2018), rapid increase in the state investment is a central propeller of high economic growth. According to World Bank data, China per capita GDP growth in the year 2015 was at 6.4% while that of India was at 6.3 percent (Ross, 2018). This situation is experienced in the increasing growth of the household and the total consumption which indicates that the two counties are growing at higher rate than the western economies. In fact, according to 2016 World Bank report, the European Union per capita income was at 1.7% with the U.S as 1.6% and Japan 0.6% (Ross, 2018).
China’s success is attributed to the increasing state-owned asset investment because the country Debt to GDP ratio has greatly deteriorated. Concern has been directed toward the debt ratio for China by the Bank for International Settlements owing to the country’s debt to GDP ratio which was at 257 % in 2017 (Ross, 2018). If this trend continues, the country ratio may hit 300% by 2020 (Lan, 2017). As such, the country development and implicit liabilities cannot be sustained through borrowing. This explains why the country’s private fixed asset investment growth has significantly decelerated to 2.8% (Ross, 2018). On the other hand, India also indicates the same economic traits. However, the article refutes these claims as false and aims to prove the contra.
Discussion
This topic is of the essence in learning economics as a subject and it will also help me to understand the concept of economic development. For instance, the article highlights that China has adopted the discretionary fiscal policy such as reducing taxation, increasing government spending, among other fiscal policies that aim at are maintaining the country’s economic development. Also, I have learned that sustainable growth of the country can be effectively achieved with an excessive credit expansion. Therefore, a country should keep its public debt at a sustainable range, to make sure that debt to GDP ratio is manageable.
Graphical Analysis
As opposed to China and India Economic development, Western economies have been on the decline. According to 2016 Fiscal year report, China and India had a GDP of 6.2 and 6.6 percent while EU had 1.6, U.S 1.3 and Japan 0.2 percent (Ross, 2018). Thus, China has been experiencing a continuation in its economic growth while the U.S is on the verge of decline at 0.4 percent as shown below.
(International Monitory Funds, 2016)
A critical evaluation of per capita GDP growth of the world giant economies is taken into consideration since the year 2007. This period marks the business cycle before the global financial crises. The China net worth per capital GDP sky rocked by 85 percent, and India by 52 percent but only a 3 percent for the U.S, the least change recorded was 2 percent in EU and Japan (Ross, 2018). Therefore, the extensive growth for China and India outperforms the western economies.

(International Monitory Funds, 2016)
Therefore, public investment is the main driver for economic growth. Presently, there is a 6 percent spending in infrastructure spending in the gross domestic product. However, this needs to be increased to eight percent on long-term basis and sustainability.
Consequence
For a country to realize sustainable economic growth, it is important to strengthen and encourage state investment. Low state investment and declining private investment have low rates of invest as seen in the case of United States, EU, and Japan (International Monitory Funds, 2016). If contra measures to those of the authors were taken, China and India would not have achieved this success. In fact, a policy primarily depending on private investment is unlikely to be problematic. The groups of people who are likely to be affected by these measures are as mentioned in the article and nobody else.
References
Lan, P. (2017). Scary Statistic: China’s Debt to GDP Ratio Reached 257 Percent in 2017. The National Interest. Retrieved 10 February 2018, from http://nationalinterest.org/blog/the-buzz/scary-statistic-chinas-debt-gdp-ratio-reached-257-percent-22824
Ross, J. (2018). Why Are China and India Growing So Fast? State Investment. HuffPost. Retrieved 10 February 2018, from https://www.huffingtonpost.com/john_ross-/china-india-growth_b_11655472.html