China’s impressive. But India may have more long-term potential.

Discussion in 'China' started by LETHALFORCE, Mar 16, 2010.

  1. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    http://www.csmonitor.com/Money/The-....-But-India-may-have-more-long-term-potential

    China’s impressive. But India may have more long-term potential.

    Mumbai, India

    This weekend we went to a wedding reception in Mumbai.
    There were beautiful women dressed in brightly colored traditional gowns. Men favored western business suits, but a few sported the outfits usually worn at Hindu weddings…with flowing, colored tunics, baggy white pants and little embroidered slippers.

    These were the men and women who are leading the Indian economy in one of the most remarkable growth stories in economic history. India has been upstaged by China. The middle kingdom’s story…from communist rags to capitalist riches in a single generation has a lot of dramatic punch. But India’s story may have a longer run. Because India grows without relying too heavily on exports. And it seems to have a large class of people who may be capable of keeping that growth on track.

    “I now work for Blackrock,” said a pretty young woman. “I did my undergraduate work at the University of Texas. Then I worked in New York for a while.

    “My sister lives in Georgetown, not far from you…”

    Another man was a Sikh, with a turban on his head.

    “I’m a metallurgist. I believe in machines. When I have money, I buy machines. I don’t trust stocks…”

    It was a Sikh who assassinated Indira Ghandi. The Sikhs – a military caste – were regarded with deep suspicion for a while. Incidentally, the French prohibit people from wearing a turban when they get an official photograph. This is to provide the government with an accurate picture of the person, presumably. But since the Sikhs wear their turbans all the time, a more accurate picture would show what the man looks like with his turban on…

    “I went to the University of Nevada,” said one of the guests. “I went to MIT,” said another. “I went to the University of Pennsylvania…”

    “I got a patent on…. I’m a biochemist… I’m on the board of… I run a business that…”

    One after the other, the résumés were impressive. These are people who have money, training, ambition, manners…

    “There is no Social Security in India,” explained a colleague. “And no welfare. We’re too poor for that. People know they have to work to support themselves and their families. And the economy is still an entrepreneurial economy. The people who have money usually run their own businesses. The money is still in the hands of entrepreneurs instead of professional managers. It’s more like the economy in the US during the early part of the 20th century, in other words, than like today’s US economy.”
     
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  3. Koji

    Koji New Member

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    I'm tired of people using the excuse of an export economy has some kind of hinderance. South Korea, Japan, Germany and Taiwan all rode the export train all the way to riches and they remain rich.
     
  4. Daredevil

    Daredevil On Vacation! Administrator

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    The difference is that other East asian countries have a respectable domestic consumption as well unlike China which lacks in domestic consumption and relies, in majority, on export and its export ecosystem.
     
  5. Koji

    Koji New Member

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    Then you are wholly unfamiliar with the Taiwanese economy during the 60's-80's.

    By the way:
    "It is often argued that China runs a current-account surplus because its consumer spending has been sluggish. On the contrary, China has the world’s fastest-growing consumer market, increasing by 8% a year in real terms in the past decade. Retail sales have leapt by 17% in real terms in the past 12 months, although this figure may be inflated by government purchases. Even so, China’s consumer spending has grown more slowly than the overall economy. As a result consumption as a share of GDP has fallen and is extremely low by international standards: only 35%, compared with 50-60% in most other Asian economies and 70% in America."

    http://www.economist.com/blogs/freeexchange/2009/07/many_things_that_you_know_abou
     
  6. Daredevil

    Daredevil On Vacation! Administrator

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    Taiwan was unaffected in those times because there was no major recession or slump when its economy was majorly depending on exports but now their consumption is quite respectable hovering around 50% of GDP. Exports being a major part of economy is all good and dandy when there is boom in the world in general but problems arise when there is recession/deflation and that is exactly is what happening now and is affecting many mercantilistic countries such as China. Imagine how much stimulus China (highest in the world as a percentage of GDP) had to give to keep its GDP growth rates intact.
     
  7. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Why are you tired of reality? All the economies you have listed have made the transition from low quality export economies to high quality export/consumer economies. The Chinois consumer levels as % of GDP have been falling the last decade while reliance on exports have only increased. The high cost of housing has driven the disposable income of urban dwellers to all time lows. Only massive stimulus cheques have spured domestic consumption but most of it is profligated by the state. Very little actually comes out of the consumer wallet. China is not only failing to make the transition into the economies you listed, they are headed in the opposite direction.
     
  8. Koji

    Koji New Member

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    China cannot forever stay in the high volume/consumer goods export system. Costs eventually rise as the economy betters (wages etc). and when an efficient infrastructure system cannot keep prices low. Prior to the stimulus actually, which is a recent event, consumer spending has increased 8% a year for the past DECADE.

    What proof do you have that the transition is not taking place? China is in the nascent stage of this transformation, witnessed by increased # of patents filed, increased # of PhD's and Engineers, and more companies like Huawei winning innovation awards and international contracts. You'll no doubt try to slyly belittle each point, but these are all signs of a shifting economy. It took Japan and Taiwan well over 20-40 years to shift.
     
  9. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Consumer spending hasn't increased as a percentage of GDP, it has dropped from 50% to 35% in the last 10 years. Most of China's economy is derived from exports and that dependence has only grown.

    To put it another way, Chinese GDP has grown 10.5% on average for the last 10 years. Consumer spending has only increased 8% so it is declining as a percentage of income by 2.5% per year. As Chinese incomes rise, their disposable income percentage is only decreasing when it should be increasing.

    The proof is in the numbers. Disposable income is falling as a percentage of income. The cost of housing is sucking 2/3rds of urban residence paycheques. More people are aged and smoking is out of control raising healthcare costs. The increase in patents is a filing sham as well as the Chinese education system. Illiteracy is on the rise while cheating and grade inflation runs rampant. The children of 200 million migrant workers are denied access to public education every day. Huawei still relies on Western electronics to run their products. You can't buy one of their computers with Chinese CPU, RAM, or Graphics card. The quality of their laptops is abysmal with more battery recalls than any other notebook on earth. China has not made the transition to making quality products. Japan and Taiwan built their economies by making quality electronics and automobiles. Nothing about "made in China" shouts quality. It is only bought because it is cheap supplied by producers who only care about the bottom line, not customer satisfaction.
     
  10. Koji

    Koji New Member

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    1980's and early 1990's...have you ever purchased a Happy Meal from McDonald's? Ever look on the bottom of that cheap plastic toy and see the country of manufacture? MADE IN TAIWAN. Quality my ass..for Taiwan and earlier for Japan, it was all about low quality mass-produced cheap goods.
     
  11. badguy2000

    badguy2000 Respected Member Senior Member

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    "may" is the key word here.

    do you know the meaning of "may"....it is "maybe" "perhaps","possiblely" or " probabaly"...in a word, it can be "maybe", but it can be "may not be" too.

    so," may" is a very smart world and We can use "may" to finish many impossbile missions.

    For example:

    Hilter "may" not died in Berlin in 1945.
    Mussolini "may" just be a gay.

    it " may" be just because Stalin was Hilter's rival in love that Hitler fought to death against Stanlin
     
    Last edited: Mar 17, 2010
  12. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    I was a kid once and still have a couple collections of Happy Meal toys from the eighties. Never had one break on me, they were solid little toys. Now, talking about Chinese toys is a whole other issue. For paid toys they are not only cheap but they poison our children. Clearly China has not made the transition in even this simple product to make.
     
    Last edited: Mar 17, 2010
  13. Rage

    Rage DFI TEAM Stars and Ambassadors

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    Your A$$ may be quality, son, but that doesn't change the fact that we're talking about a largely export-oriented, and therefore export-dependent, economy.



    No doubt you will 'slyly' try to suggest we "will all try to slyly belittle each point", but the fact is, that the "increase" in Chinese patents, is due in large part to the "laws", passed in December 2008 requiring foreign-owned and foreign-licensed companies operating in China to patent their innovations in China first ; that the "news" of China producing "more" graduates or engineers or more engineering graduates than India loses its glittering sheen, when you consider the fact that they produced more engineers than India only in 2007, despite being a largely manufacturing economy and having decades of a head start; that despite receiving accolades for 'innovation', Huawei's "opaque ownership" and murky 'share ownership plan' ensure that foreign stock ex's are wary of listing it even as 'upstart' Indian telecom giants like Reliance receive clearance for the LSE, and that foreign intelligence agencies have it penetrated through and through [infact, it was US intelligence agencies that tipped India off to Huawei's caliginous ownership in 2005].


    http://www.radio86.co.uk/china-insight/news-today/6979/patent-in-china-first-or-lose-ipr-protection


    http://www.mwechinalaw.com/news/2009/chinalawalert0209c.htm


    It ain't just about that, Joki.

    Since you love publishing 'articles', rather than qualitative analyses, here're a few recent ones that directly address the issue:



    http://economictimes.indiatimes.com...stry-in-India-by-2014/articleshow/5689822.cms



    Read the news. Companies, and big ones, are already gearing up for the impending change.
     
    Last edited: Mar 17, 2010
  14. tony4562

    tony4562 Tihar Jail Banned

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    Are you sure about what you are talking about? China is the largest car producer and the largest car market, do I need to say more?
     
  15. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    If GoI paid out $18.7 billion in auto subsidy do you not think India too would become the largest car market and producer?
     
  16. tony4562

    tony4562 Tihar Jail Banned

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    No, first of all 18.7 billion is peanuts compared to the value of china's automobile market (worth 10 times more). Further more india does not have that many buyers at present, then you can not fit that many cars in india's roads today as expressway, high-raised beltways are still in its infancy in india.
     
  17. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Then lets add the 1.14 trillion RMB in reduced auto tax.
     
  18. badguy2000

    badguy2000 Respected Member Senior Member

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    this year, the auto sales in China will be about 20M ,that almost = USA's +Japan's.

    in 3 years, the auto sales in CHiina will = EU's+USA's +Japan's.
     
  19. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Sure you will... Chinese auto exports in 2009 dropped 46%. Auto industry is only propped up by the state, once aid is withdrawn it will drop down to less than 10 million.
     
  20. Daredevil

    Daredevil On Vacation! Administrator

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    All these spur in car sales is due to stimulus. Increase in car sales is consequent to stimulus. Just check the below articles.

    http://www.bloomberg.com/apps/news?pid=20601089&sid=aQm2EpT73Krc

    http://www.bloomberg.com/apps/news?pid=20601080&sid=aQ1e9ccOYGcU

    http://www.businessweek.com/news/20...ger-car-sales-surge-on-stimulus-update1-.html

    http://www.chinadaily.com.cn/china/2009-01/28/content_7430533.htm
     
  21. badguy2000

    badguy2000 Respected Member Senior Member

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    when CHina itself is the global biggest auto market and it is very hard for auto companies to finish domestic auto orders, all auto companies in CHina are not so interested to oversea sales.
     

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