Government estimates released Monday indicate strong growth in the industrial and services sector is helping the economy rebound after slowing in the wake of the global financial crisis.

The forecast of 7.2 percent growth for the fiscal year that ends in March comes amid growing optimism in India.

Consumers have returned to shopping malls, and sales of cars and mobile phones have picked up rapidly in recent months. Many companies are posting good profits and hiring new staff. Economists say India’s recovery has been largely driven by strong domestic consumption among its more than one billion people.

Finance Secretary Ashok Chawla says that even the agriculture sector, which has shrunk in the wake of a widespread drought last year, could revive because of good winter harvests by farmers.

“The fourth quarter we are expecting it to be much better, more robust so overall agriculture is not going to see the kind of dip which was initially out,” Chawla said.

Although farming contributes relatively little to the country’s gross domestic product, it remains a key concern because two-thirds of the country’s population depend on agriculture for a living.

However, economists say uncertainties lie ahead. The shrinking agricultural output last year has stoked high inflation and led to a huge jump in food prices. This in turn has brought pressure on the government to scale back the stimulus measures that infused billions of dollars into the economy and helped its recovery.

A top official at the Planning Commission, Montek Singh Ahluwalia, says the government will have to contemplate tightening monetary policy as the economy strengthens.

“It has been my consistent view that if it looks that the economy is back on seven plus per cent growth path, which it clearly now is, yes, we should say the stimulus has succeeded and we should begin to phase it down,” Ahluwalia said.

Stock markets and the private sector have been wary of such a move by the government, hoping it will not set back the tentative recovery.

However, the Indian government’s estimates of a return to a high growth path are backed by international institutions such as the World Bank. In a report last month, the World Bank said that economic revival in India remains resilient despite a slow global economic recovery.

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Shipping containers are piled up at at a container terminal in the port of Dalian, China (11 Sep 2009 Photo: AP)

China has hit back at the United States after President Barack Obama promised to take a tougher line with Beijing over currency and trade. Meawhile, the United States is downplaying reports of rising tensions with China, saying the two countries will work together on issues of mutual concern but that they sometimes disagree.

In the latest disagreement between Washington and Beijing, Chinese Foreign Ministry spokesman Ma Zhaoxu on Thursday said the country’s currency was set at a “reasonable level.”

And he warned “accusations and pressure” would not help solve the problem.

Ma says the exchange rate is not the cause of the trade deficit between the two countries. He says China hopes the United States will regard trade and currency issues “in a balanced and fair light.”

The terse response comes a day after President Obama promised to adopt a tougher stance toward Beijing, and push for a further opening up of Chinese markets.

U.S. companies, along with many in Europe, have longed complained that Beijing’s currency policies give Chinese firms an unfair advantage.

Many trade analysts and economists say the yuan is set at an artificially low level, making Chinese goods cheap overseas.

But Beijing rejects calls for it to revalue its currency.

The issue is the latest in a growing list of grievances between the two economic powers.

Ties have been strained in recent weeks, starting with claims of Chinese cyber-attacks on U.S. Web sites, including Google.

President Obama’s plans to meet the Dalai Lama, and Washington’s deal to sell arms to Taiwan have strained relations further.

Ma repeated threats of sanctions against U.S. companies involved in the Taiwan arms deal.

Ma says China “will surely” impose sanctions against these companies due to what he calls Washington’s “blatant disregard of our opposition and representations.”

Wednesday, President Obama said he would not take a protectionist stance toward China, which is expected to become the world’s second largest economy this year.

He said to shut the U.S. off from the Chinese market “would be a mistake.”

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Made in China with American sports technology,
Made in China with European styling,
Made in China with software from Silicon valley
Made in China with French designers,
Made in China with engineers from all over the world
…
When it says made in China, it really means made in China, made with the world.

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The table below shows major mine accidents happened in recent years.

Source:163.com