Chief Economist of the World Bank Kaushik Basu Gave Talk at Neo Capital

This was the 8th Neo Talk of the entire series, as well as the first time that Neo Capital invited world-renown academic leader to conduct an open dialogue on the economic development of China and India. As one of the pioneers in the fintech industry in China, Neo Capital has achieved satisfactory market position and brand recognition. To be well prepared for the policy and market uncertainty, it's necessary to gain a deep comprehension about the pattern in economic development in the future.

During the Think Forum, Kaushik Basu indicated that China and India should work together to push the progress of globalization, in hopes of enhancing the cooperation between the large economies in the world. Basu served as an economist and former Chief Economic Adviser to the Government of India. His view points are not only valuable for a country, but also beneficial to the strategy formulation of an enterprise. We cover the most important ideas of Basu here:

The lack of two-stage thinking is commonly seen in policy making, and it harms national interests greatly. Take foreign exchange policy as an example, India had very little foreign-exchange reserves before 1991, therefore, the government instinctively formulated the regulation policies. This had led to the obstacle of the outflow of foreign exchange. What policy makers were not aware of was, if foreign exchange outflow was prohibited, people wouldn't be willing to bring  capital into the country. In 1991, India government had conducted a transformation on foreign exchange policies. There were some critics indicated the pessimistic forecast, believing that the poor level of India's foreign exchange reserves was going to be consumed very soon. But the truth was on the contrary, India's foreign exchange level had gradually increased to 5 billion US dollars. With the development of the past 20 years, the foreign exchange reserve level had increased to 300 billion US dollars.

In the long run, it is the intellectual minds that facilitate the economic growth of a country. The ways of thinking, regions, and patterns have had tremendous impact on our life more than we are conscious of. Looking back at the history, it was the innovative ideas that move the economy forward. Take ancient Greece as an example, Greek cities were intellectual hubs. In the development of history, when it comes to huge transformations, there are always new ideas and new concepts pushing the momentum.

China and India should work together to facilitate globalization. Compared with the past, China and India have more interaction nowadays. The population of the two countries make up 30% of the world's population and are becoming more open and active. The roles of China and India are becoming increasingly important on the global stage, influencing Western economies and further enhancing economic interaction.

SOURCE Neo Financial