Internet is like hosting a party and making a lot of money, says economist Andy Xie

The recently concluded Economic Times' Global Business Summit saw Andy Xie, the former Morgan Stanley and World Bank economist, calling India "one of the most closed economies of the world."

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In an interview to TOI, Xie said India needs to embrace foreign capital to support its economic development.

"India needs capital to build the country and it is all about getting capital, whoever can give it to you, whoever can build for you, be practical. Be colour blind. Nobody is perfect, everybody has problems," Xie said.

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While advocating foreign capital for India's economic development, he mentioned that because of cheaper funding, new internet companies are taking away others’ business , even as their contribution to productivity is nil.

"Internet at this time is a huge bubble. You look at all the Internet businesses. They don't create anything. They are trying to redistribute existing businesses from their channels. People are pouring money into them like, Amazon is entering every business," said Xie.

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He also blasted Facebook, calling it a "distraction rather than disruption."

"Where is Facebook adding value? It is just taking advertising revenues away from established media outlets and it makes money because people are entertaining each other. You get them together, Internet is like hosting a party .Then you stick some commercials in between and you make a lot of money. People who used to provide the real stuff they are unemployed. The society has become a whole lot worse," he added.

On e-commerce, he said that he doesn’t have any faith in the medium. "E-commerce is all about selling fake stuff. Any e-commerce business which is prospering must be selling fake stuff. You look at how they make money. The issue is interest rates have stayed so low for so long," said Xie.

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(Image source: Financial Times)