Another two BRIC countries, China v. India.

As I wrote in the article regarding to Brazil, I mentioned that BRIC countries have quite different economic base in nature. The news today reflects quite well on the difference for BRIC on this economic growth crossroad.

1. Inflation is the major concerns for China and India:
US stocks fall as commodity decline on China concern
The reporter points out the slowdown in China, particularly in the housing markets, drives the commodity price lower today. This is not a fresh story that China wants to curb their real estate markets and control some  more on inflation. However, such attempts may hurts their economic growth further, yet we did not see the immediate consumption growth comes along yet. Since both expected inflation and policy uncertainty are high, (when I talks of uncertainty, I mean the uncertainty on the results.), I do not see why Chinese citizens may let loose their purse. Plus, a sizable proportion of their income might already pledge into the housing market, which won't be available for the following years to come.

Shanghai Index lost 1.36% yesterday, a stronger retreat may be seen before April.

India Holds rate, as inflation accelerates
India also has similar problems. Their central banker just decided to keep the rate high to curb inflation. Unlike Brazil, which cut their interest rate to boost growth, India and China remain very cautious on the domestic inflation since they mostly has to import the commodities that are needed for manufacturing and exporting sectors.

2. Manufacturing, Consumption and Infrastructure:
As for now, Brazil tends to focus more on manufacturing, while China are trying to create more domestic demands. Brazil has the opportunity from two big games, so I would think it is a brighter future for them, as long as they take the chance well. As for China, the key is still on housing market. If they can free some more capital from housing projects, such capital could do much more in other sectors.

India is still a terra incognita for me, yet my best guess is from what a friend,who frequently travel there, advises me, focus is on infrastructure. He mentioned to me that India is still quite in lack of some modern infrastructure as we take for granted. Traffic, power supply, water supply, etc. The only problem is government deficit, now runs some 5% of their GDP. Could government play a major roles to push further public investment? Their capacity is in doubts.

Would BRIC icon fade its charms for the following 3 years? I would say a no, yet it won't shine as bright as what we have expected before.