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Is India the Next China? [Chart]

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Is India the Next China? [Chart]

Is India the Next China? [Chart]

The Chart of the Week is a weekly feature in Visual Capitalist on Fridays.

It’s no secret that the most recent bull market in commodities and global growth corresponded with the emergence of China on the world stage. When a country with over 1 billion people can grow at 10% for decades at a time, the power of compound interest starts to add up.

The only problem is that Chinese growth is starting to slow down. To start 2015, the world’s second-biggest economy grew at its slowest pace in six years at a clip of 7.0%, which was down from 7.3% in Q4 2014. Further, the rate of growth in investment, industrial production, and retail sales have been declining consistently over the last four years.

The world is looking for a new China to be the world’s growth engine. Does India fit the bill?

No one is denying that India has the potential to be a game-changer for the global economy. With 1.25 billion people and growing, India will be the most populous country in the world by 2028. The challenge is that the majority of people in the country are terribly poor (GDP per capita of US$1,500) and that the country’s bureaucracy strangles almost and all business endeavours. That said, there are recent economic and bureaucracy reform green shoots that show that India could at least temporarily swing out of its funk.

We did some back of the envelope calculations to see at what rate India would have to grow to be as significant to the world economy as China is today. We looked at India growing at high (10%), medium (7.5%), and low (5%) rates over the coming years. Based on this, India wouldn’t be comparable to today’s China until 21 years, 31 years, or 57 years respectively. (Note: to keep model simple, we had the rest of the world growing at a steady pace of 2%)

The end result shows the staggering power of compound interest: if India grows at a high rate similar to China over the last decades, India could be a world player in the coming decades. If growth is crippled by bureaucracy and it hovers around 5% on average, India won’t become the next China until way in our future: the year 2072.

On the bright side, Brazil may also be a good “bridge” for global growth. China certainly believes so, and that’s why they just announced an investment of $50 billion into the country’s infrastructure projects.

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Markets

Will Tesla Lose Its Spot in the Magnificent Seven?

We visualize the recent performance of the Magnificent Seven stocks, uncovering a clear divergence between the group’s top and bottom names.

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Will Tesla Lose Its Spot in the Magnificent Seven?

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

In this graphic, we visualize the year-to-date (YTD) performance of the “Magnificent Seven”, a leading group of U.S. tech stocks that gained prominence in 2023 as the replacement of FAANG stocks.

All figures are as of March 12, 2024, and are listed in the table below.

RankCompanyYTD Change (%)
1Nvidia90.8
2Meta44.3
3Amazon16.9
4Microsoft12
5Google0.2
6Apple-6.7
7Tesla-28.5

From these numbers, we can see a clear divergence in performance across the group.

Nvidia and Meta Lead

Nvidia is the main hero of this show, setting new all-time highs seemingly every week. The chipmaker is currently the world’s third most valuable company, with a valuation of around $2.2 trillion. This puts it very close to Apple, which is currently valued at $2.7 trillion.

The second best performer of the Magnificent Seven has been Meta, which recently re-entered the trillion dollar club after falling out of favor in 2022. The company saw a massive one-day gain of $197 billion on Feb 2, 2024.

Apple and Tesla in the Red

Tesla has lost over a quarter of its value YTD as EV hype continues to fizzle out. Other pure play EV stocks like Rivian and Lucid are also down significantly in 2024.

Meanwhile, Apple shares have struggled due to weakening demand for its products in China, as well as the company’s lack of progress in the artificial intelligence (AI) space.

Investors may have also been disappointed to hear that Apple’s electric car project, which started a decade ago, has been scrapped.

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