US Economic Strategy- Collaborate with India to fill the Economic fallout with Latin America, Russia, China & Middle East

The US economy is on the verge of coming out of multiyear downturn. The recent job and other reports are encouraging and it is expected the Fed will increase the interest rate again in coming months. In order to maintain its growth especially in election year, US government is trying hard to ensure that corporate win International contract. In US there are lots of resentment within the locals that Foreign companies are taking out local job and it impacted the government image as they failed to control that which they promised during last presidential election.

At the same time; US is alsofacing tough situation in their bilateral relationship with Russia, China andMiddle East. The US initiated initiative to impose International sanction against Russia is hurting more the US based companies compared to Russian establishment given their strong relationship with third world countries.

With China, US is at loggerhead due to South China Sea issue. Blame game is at the peak. Chinese got very cautious about US movement in South China Sea and it is turning into flash point and ofcourse in due course it will start to show the impact on US economy as US government will slow down their dependency on China to procure low cost product and now focusing hard to re-established their own manufacturing hub.

In my point of view, US main trading partners are based out of Middle East region and their US is bleeding their taxpayer $ to safeguard countries with their interest. Saudi Arabia economy is in shamble due to their engagement in Yemen, low oil price and higher cost on social welfare scheme. It impacted Saudi Arabia government to go for the free hand based new technology to other infrastructure upgrade. At the same time; major unrest in Iraq and Syria impacted the neighboring countries will to spend more on new initiatives.

Most of the counties in LatinAmerica is struggling with their depreciating currencies to major slowdown in economy along with political unrest in some of the countries.

Given the above environment, US wasted no time to extend its arm towards India with clear approach of tapping Indian marketplace as well as rebalance its strategic positioning in Asia Subcontinent. Once the reluctant US while offering India any warfare system to any other technology is now changed their approach while dealing with India. Post Honorable Prime minister of India initiative of "Make in India"; US companies through their government diplomatic channel is offering to setup manufacturing hub in India that include the technology transfer covering all sector to grab the much needed business in India. 

Indian government recent decision to modernize infrastructure to Smart cities to Railways to Defence itself is more than $300 Bn business opportunity for next 8 to 10 years. In the mean time; China proximity with Pakistan also prompted US to come closer to India to neutralize China growing clout. Given the above circumstances, Indian Honorable Prime minister with his master strategic move wasted no time and attracted the leaders of most of the countries on the discussion table and trying hard to bring in investment which India needed the most at this point of time.

China Policy of State Support to Companies May lead to Major Financial Crisis

Once the booming economy and the backbone of worldwide manufacturing is now reeling under tremendous pressure from all corners. China current generation of youngster never understood the meaning of economic downturn and always went from one step of growth to another. Chinese government did fabulous job in opening the their economic in a very controlled environment without losing the control of economy for the last 30 years and now giving direct competition to world power like USA, Russia and Japan.

Chinese government realized that if they want to get powerful in all front then they should be good in infrastructure as well as very strong export. For export Chinese government offered packages to local SME and SMB to start the manufacturing center and hire low cost of resource to keep the cost of the product low and then played around with their currency to maintain the trade surplus with most of the countries they did business.

The overheating of economy coupled with Global economic slowdown especially in Middle East impacted china hard. Most of the government funded companies started falling apart as well as private companies who took loans from banks start facing servicing their debt.

The stock market crashed and government were forced to jumped in and also devalued their currency to keep themselves competitive in the marketplace. It is correct that China is having sufficient foreign reserve to sustain the downturn but also having sprawling economy and population to support.

you take any industry and they are sitting on over capacity and dumping it to other countries which is creating lots of resentment about Chinese companies trade practices. The way India impost MIP (Minimum Import Price) to protect its Steel sector, I am sure other EU countries especially UK will be doing so soon. It wont be too far when the action by partner countries will impact the job market which will lead to mass layout in their core sector which will lead to more financial problem. I strongly believe that China government must be working on formula to reduce the capacity to ensure that their companies dont get the dent in any form