(Yicai) Aug. 28 -- India already has a bigger population than China so its economic scale will catch up with China sooner or later. But India is unlikely to pose a major challenge to China’s manufacturing status and there are several other big differences in their patterns of growth, a chief economist said.

India's economy has performed well since the pandemic, while China’s economic recovery remains weak, leading many investors to wonder whether India will become the next China. Wang Tao, chief China economist at Switzerland’s UBS Investment Bank, answers their questions below.

1) Can India become a manufacturing and export powerhouse like China?

India's manufacturing sector is relatively small and it is not likely to pose a major challenge to China's manufacturing status.

But India has a number of advantages such as plenty of cheap labor, infrastructure that is constantly improving, policies to lure foreign capital and a relatively good international image. The country also has an enormous market, equivalent to China's in 2006 and 2007. This will be key to the quick growth of India’s manufacturing industry. India is very likely to narrow its gap with China and seize some market share from China.

2) In the past 20 years, China's rising middle-class has had growing demand for global consumables and services. Will India's market expand in the same way?

Indian people's consumption growth has doubled in the past 10 years. Zurich-based UBS expects India to overtake Japan to become the world’s third biggest consumption market in 2026. If India's consumption grows as fast as its gross domestic product, India's domestic market will reach China's current level years before its GDP does.

Indian residents have a high level of bank deposits and their borrowing is low. We believe that creating good employment opportunities is the most critical driving force for the sustained growth of consumption. And as the economy grows, demand for durable goods such as autos will increase.

3) Will the growth of India’s economy impact global commodity and energy markets in the same way that China’s swift growth did?

India is already a big importer of oil and coal. But demand in India is not likely to grow as fast as it did in China.

Industry accounts for a lower proportion of India’s economy than in China, and India's methods to grow the economy are also not as capital and energy intensive as those of China. India's rich resources and different urbanization mode means that the country is not likely to import iron ore and other metals on the scale that China did in the past.

(The author Wang Tao is Head of Asia Economics and Chief China Economist at UBS Investment Bank.)

Editors: Shi Yi, Kim Taylor