Beijing's market interventions and devaluation of the yuan, as well as waning economic indicators in China, have sent markets reeling – and prompted fresh worries about the global economy.
But while China's slowing growth will be devastating for a number of emerging markets, and more broadly for all of Asia, there is one notable and prominent exception shielded from the ongoing fallout: India.
Indonesia, Malaysia and other commodity-rich countries, of course, have pumped endless amounts of coal and oil into China's factories and power grid during the boom years. Other countries provided cement or steel, while African countries provided oil and valuable metals such as copper.
All of these countries made a fortune by fuelling the industrial evolution that has transformed China in recent years, while other lower-wage locales – such as Vietnam and Cambodia – have benefited as rising wages in China drove certain export-oriented industries, such as garment making, deeper into Southeast Asia. Now that the cyclical boom is over, almost all of these countries are in trouble.
But India is not an export-oriented economy at risk from cooling growth in China. And now might be India's time to surge ahead and finally realize everyone's long-standing expectations.
Unlike South Korea, India is not a manufacturing powerhouse with China as its biggest customer. Unlike Japan, India is not stagnant, with a shrinking population. Unlike Thailand and Malaysia, India has a stable, uncorrupt, democratically elected government that is interested in economic growth.
Unlike Indonesia, the giant of Southeast Asia, India will actually benefit from events in China and is now heading toward higher growth rates – despite the huge challenges that accompany steering a country as vast, diverse and poor as India. And unlike commodity exporters – including Canada and Australia – India is a net energy importer, like Japan, and benefits mightily from the plummeting oil and coal prices that have followed China's steep drop-off in demand.
In a global economy now chilled by and fearful of China's precarious slowdown, India has a clear opportunity to "take the baton of global growth" from China, according to Jayant Sinha, India's minister of state for finance. Arun Jaitley, India's finance minister, echoed that sentiment. "The world needs other engines to carry the growth process," he said, "like India."
That might be pushing it a little too far, given India has hardly been driving global economic growth the way China has in recent years. But the pithy saying has a bit of truth to it. India's economy has already edged ahead of China's with predicted gross-domestic-product growth of 8.5 per cent in 2015, compared to China's decelerating growth of 7 per cent – though, of course, it's always easier to grow faster from a smaller base.
Like China, India's economy surged over the past two decades. China's boom, however, was in manufacturing, which provided jobs and drastically reduced poverty rates, while India's was in outsourcing and the services sector, which didn't employ many, even as India's population grew exponentially. India's economic growth – largely taken for granted – eventually began to wilt, and then crumbled completely after endless corruption scandals.
The election of Prime Minister Narendra Modi in 2014 brought new momentum to India's economy. The Bombay Stock Exchange has soared, and foreign investors have piled in. Mr. Modi promised to end corruption, implement pro-business reforms, start an infrastructure-building boom and lure big manufacturers that would create jobs – just as he had done in the state of Gujarat, where he had been chief minister for more than a decade.
Things have not proved so simple – and at the ground level much of this looks more like overpromised hype than subcontinental reality. Mr. Modi modernized the bureaucracy, but tinkered with economic reforms instead of going in with the sledgehammer many wanted. His budgets didn't seem bold, expectations faltered and some social tensions increased.
But there has been some progress. Mr. Modi's globe-trotting economic diplomacy mended relations in the region, there is enthusiasm about India's thriving technology startups and Taiwanese iPhone-maker Foxconn recently announced intentions to eventually open 12 factories there – employing as many as one million Indians.
At the moment, China is trying to shift its furious growth away from manufactured exports to a more sustainable services-oriented economy, and is having some success, even as India is trying to gear up and lure big industry – which is difficult, since India's work force is less literate, skilled and employable than China's.
Can India fuel global growth the way China has? Probably not. But India can at least provide a new narrative for global growth – and for hundreds of millions of Indians, China's slowdown provides momentum that might help turn that story into reality.