India or China: Which Is the Better Place to Invest?
When both India’s Bombay Sensex and China’s Shanghai composite indices have soared about 70 percent year to date, many investors have added both markets to their A-list. But which country is a better place to invest? David Riedel, founder of Riedel Research Group and Paul Goodwin, analyst and editor for Cabot China & Emerging Markets Newsletter shared their opinions.
David Riedel picks India over China, based on India’s demographics, politics and productivity.
“China is the fastest aging population in the world and India has 31 percent of its population under the age of 14. That’s the consumer boom waiting to happen,” Riedel says. He also thinks India’s democratic political system is constructive to business investment. India’s infrastructure, however, still lags way behind China, which leads Riedel to believe that India is a land of more opportunities.
“There is a lot of hanging fruit to be harvested in India to get the productivity together and build that infrastructure,” says Riedel. “India is the place to go with your million dollars.”
On the other side, Paul Goodwin makes a case for investing in China.
“China is what’s happening right now. Whether or not you approve of a communist government, the government is extremely experienced and good in running the economy. Right now China’s engine is just running faster,” Paul says.
As China's industrial output rose 16.1 percent in October from a year earlier, more investors start to believe China’s economy is on a solid path to recovery. After Beijing's initial $586 billion stimulus package, Goodwin believes China’s ballooning middle class has become the main driver behind its growth and recommends consumer stocks such as Baidu.com (China’s top online search engine company) and Ctrip.com (an online travel agency in China) that play into the spending power of China’s middle class.
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