ABB exec sees easing in Chinese, Indian growth

By Scott Malone

NEW YORK (Reuters) - A top executive at Swiss engineering group ABB Ltd. (ABB.N: Quote, Profile, Research, Stock Buzz) said on Wednesday that the Chinese and Indian economies are unlikely to keep up their torrid recent pace of growth in gross domestic product.

"In China, we see a slight reduction, but should we call it a reduction? If China grows 11 percent and drops to 9.5 percent we can call it a reduction," Dinesh Paliwal, president of global markets and North American CEO for ABB, told the Reuters Manufacturing Summit in New York.

After the Beijing Olympics in 2008, Paliwal added that much of China's growth will shift to the central and western parts of the country, which are still less developed than its coastline. ABB makes automation systems used in factories and power-management equipment.

He added that India's democratic political system will also likely require it to slow its pace of growth, to ensure that the benefits of development are more widely felt.

"India may not be able to keep 9, 10 percent growth as they are right now dreaming," said Paliwal, who was born in India.

"It's a different political environment and they have to be careful that they take the whole population with them otherwise they get thrown out of parliament," Paliwal said. "Will it be 7 percent, 8 percent? That is a number I would be very comfortable using."

He said ABB's sales rose 50 percent last year in India and have been growing at 20 percent to 30 percent per year in recent years in China.

Paliwal added the company is unlikely to repeat its 22 percent 2006 U.S. sales growth this year.

"It is not sustainable over the long time," Paliwal said. "We do expect double-digit growth, hopefully. The market looks pretty robust."

ABB over the past year has profited from rising demand for energy-efficient power generation systems and as industrialized and developing countries revamp or expand their power generation systems.