GE looks to India and China to bail it out from US economy downturn

November 14th, 2007 - 3:01 am ICT by admin  
According to a Financial Times report, GE is experiencing a downturn in the United States economy, but the strength of emerging economies such as China and India, will help the conglomerate to tide over a potential credit squeeze and crisis.

In an interview with the Financial Times, GE chairman and CEO Jeffrey Immelt said that in spite of the troubles sparked by the credit squeeze, “outside the US, particularly in China and India, economies appear strong”.

There was every prospect of GE’s sales outside the US expanding in the next few years by 10-15 per cent annually, he said.

Immelt said the company’s sales in emerging markets such as China and India were expanding at 20 per cent a year, and there were few signs of this growth slowing.

His comments will be welcomed by adherents of the theory of “decoupling”, the idea that even if there is a slowdown in the US, traditionally the world’s economic locomotive, the global economy is moving into a new era in which growth in developing parts of the world becomes the key component of economic expansion.

Although some economists say the decoupling notion is exaggerated, others cite as evidence for the view the European Union passing the US this year as the biggest destination for Chinese exports, and rapidly rising intra-Asian trade.

Immelt said it was also important to take into account the impact of sovereign wealth funds, state-run bodies pumping large sums into the global economy and financing large acquisitions. (ANI)

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