'India emerges as global services power, but China dominates...': CEA V Anantha Nageshwaran

Budget 2025: Chief Economic Advisor V Anantha Nageshwaran on Friday said India has emerged as an important player in global services. However, China's presence and dominance cannot be undermined in the global market. 

Nageshwaran highlighted India's rising prominence in global services, acknowledging its increasing influence in the sector. On the other hand, China has maintained a dominant presence in high-tech and medium-tech industries over the past few decades. The emphasis was placed on China’s manufacturing prowess, with its share of world gross output expected to surpass that of the next 10 countries combined.

Nageswaran said: "One of the outcomes of the globalization era was also the rise of China as a manufacturing power. India also rose as a power in global services... The presence of China is pervasive and dominant. Manufacturing as a share of world gross output, China's share will probably be higher than the combined share of the next ten countries. It gives them a lot of strategic levers and advantages in several areas as we will see later in some other dimensions as well. This is an important development along with globalization in the last 40 years...."

It was noted that in 2010, China had a minimal share of global demand and limited production capacity in various sectors. However, in the following 11 years, China's domestic demand has grown while its production capacity has outstripped this demand. This development has positioned China as a major supplier of essential ingredients and components for the global energy transition.

The Chief Economic Advisor (CEA) emphasized the significant influence of China in producing essential materials needed for the energy transition, including copper, lithium, nickel, cobalt, graphite, and rare earth materials. He noted that while these materials are not always extracted in a single country, their processing is primarily concentrated in one nation. This centralized control also applies to vital components like solar panels and battery cells, underscoring China's substantial position in the worldwide supply chain for energy transition technologies.

The Economic Survey noted the global economic landscape is being transformed by China's swift industrial growth. As forecasted in the Economic Survey 2025, UNIDO predicts that by 2030, China will dominate the manufacturing sector, representing 45% of worldwide production and outpacing the combined output of the United States and its partners.

The survey noted that  China's ascent is not solely based on its production capacity; it also revolves around strategic control. The Economic Survey emphasizes how China has utilized competitiveness, economic policies, and access to resources to dominate crucial sectors such as:

Electric vehicles (EVs), disrupting established leaders like Germany and Japan.
Essential minerals (lithium, cobalt, nickel, graphite) vital for batteries and clean energy technologies.
Industrial supply chains, with influence spanning mining, refining, and distribution.

Through this dominance, China has attained a level of strategic influence unprecedented in modern history.