The doubters seem to be back with a vengeance. And this time around, with a lot more firepower. The QIP funding route, which a clutch of companies used to good effect in the not so recent past, seems to be running a bit dry again. Apparently, a couple of firms that were inspired by the fund raising spree of their counterparts have not met with a very good response. Although part of the blame could be attributed to the huge run up in the stock markets that have made valuations far more steep, the liquidity tap may not be fully open after all. This fact has also been highlighted in sufficient detail in a recent report released by the World Bank.

The report states that net private capital inflows to developing economies that stood at a whopping US$ 1.2 trillion in 2007 and fell to US$ 707 bn in 2008 is likely to drop further to a measly US$ 363 bn in 2009. Not a comforting number indeed. It should be noted that our economy may not be dependent on exports like that of other emerging markets like China and Russia but we do have reasonable capital linkages and hence, if there aren't enough capital inflows, the domestic economic growth may suffer to some extent. Thus, finding an appropriate source of capital that could make up for the shortfall is likely to emerge as the biggest challenge for Indian companies in the near term. For the medium to long term though, things are likely to ease up what with the same World Bank expecting the domestic economy to grow at 8% in 2010 and an even better 8.5% in 2011. Interestingly, the financial institution believes that even the Chinese juggernaut will grow at 8.5% in 2011, of course, on a higher base than India.

China draws the West's ire
In an important development that can have far reaching implications on world trade and may even slow global economic growth, The New York Times has reported that the US and the European Union have filed a complaint with the WTO (World Trade Organisation) alleging that China is deliberately trying to limit exports of certain commodities like bauxite and zinc of which it is the largest producer, to give its exporters that use these materials an upper hand. Not only this, accusations are also flying thick and fast in the wake of a recent ruling by the Chinese government that has mandated all government institutions to buy only Chinese made goods and resort to imports only when there are no domestic substitutes available.

These allegations are likely to further dent China's reputation as a strict enforcer of WTO rules, doubts over which have been regularly surfacing ever since the dragon nation joined the WTO in 2001. "China is not only continuing but accelerating many of the protectionist approaches they've taken in the past to promote economic development", is how the article chose to put it across. What also added further fuel to the protectionism fire was a less than expected 12% drop in the country's exports to the US in the first four months of the year. In comparison, Japan, another economy that is hugely export reliant, has seen its exports plunge a huge 45%. Secondly, the country has also been successful in halting the rise of renminbi against the dollar by intervening heavily in currency markets by buying dollars and other currencies and dumping its own. Needless to say, such moves have not gone down well with its major trading partners.