'Make in China' slows in face of rising costs

Discussion in 'China' started by Ray, Jan 1, 2015.

  1. Ray

    Ray The Chairman Defence Professionals Moderator

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    The US economy coming on even keen seems to be affecting China in a big way.

    The Chinese Govt has to give out more doles to the industry to keep it above the water.

    One wonders how much the Chinese Govt can dish out without affecting its other sectorial priorities.
     
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  3. ezsasa

    ezsasa Senior Member Senior Member

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    The current chinese slowdown is not necessarily the beginning of the end of chinese economic superiority. My guess this is a symbol of consolidation as they move from export oriented economy to consumption based economy. Some reports say China is planning to take on the role of world's investor in three years time.
     
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  4. Sambha ka Boss

    Sambha ka Boss Regular Member

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    Their per capita income is rapidly rising and also the large part of population is getting old may be facing labor force crisis in the future, so very obvious China may lose its manufacturing edge very soon.
     
  5. mattster

    mattster Respected Member Senior Member

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    I dont see how China can balance the environmental concerns and all the other long term issues with 7% growth rate.

    The country is horribly polluted and all the manufacturing and construction is only making it worse.
    It needs to get rid of all its coal-fired power plants. It will have to shutdown hundreds of manufacturing plants that pollute.
    It needs to take care of millions of elderly residents.

    All this stuff will make the cost of doing business more expensive and wages will go up....which is not a bad thing.
    But how do you do all this and still maintain 7% growth rate. I just dont see it. I think the best you can hope for is 5%.
     
  6. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    China no longer wants to be cheap goods manufacturer for westerners. Rising labor costs is good indication for the process. They are moving up the value chain. So unfortunate if India takes its place for low cost manufacturing.


    Sent from my iPhone using Tapatalk
     
  7. karn

    karn Regular Member

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    Any country that has not yet fully urbanised can easily have 8 % + growth . Buildings and roads are an easy way to boost GDP numbers .
     
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  8. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    India does not have infrastructure or motivation to become a cheap manufacturer. Any low end manufacturing Done in india is for domestic consumption not export.
     
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  9. no smoking

    no smoking Senior Member Senior Member

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    Oh, no, India does have the motivation to become a cheap manufacturer. India has a serious problem of creating jobs for her huge unskilled work forces. The only industry sections can provide this scale o employment are: LOW END MANUFACTURING!
     
  10. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    True but India's own domestic consumption is large enough to absorb any and all low end manufacturing .China has the infrastructure to support it's own demand and exports to the world.
    Unskilled labor is still in big demand in agriculture and construction.
     
  11. no smoking

    no smoking Senior Member Senior Member

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    No, your own domestic consumption is enough to absorb your current scale of low end manufacturing, which employs less than 20m work force. Considering India has a population close to China, we can assume that India need to provide same amount of jobs to its work forces. Then you have to multiply this by 5 times will be the number of Chinese workers in the same industrial departments. With same amount of workers, it is guaranteed that the output of India will be the same. Since India people won't wear more cloths or shoes each year than Chinese. So, the consumption of India on these products would be as same as China. Then we can conclude: you need a world market to absorb the majority of any and all low end manufacturing.

    No, your agriculture and construction don't demand these unskilful workers. The only reason they accept these workers is they have no choice.
    When these people have no better place to go, they have to stay with their land.
    When your construction companies have no better candidates, they have to employ these people. This leads to a problem: the productivity of these 2 departments is damn low.
     
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  12. Compersion

    Compersion Senior Member Senior Member

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    PRC can reduce their interest rates ...

    but the bigger picture is how much integrated PRC will become with global standards and transparency in future.
     
  13. Redhawk

    Redhawk Regular Member

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    Good points, Ray. It is an "interesting" time for the PRC's economy.
     
  14. Compersion

    Compersion Senior Member Senior Member

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    machines can make a plastic bucket quickly and cheaply.
     

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