Can India substitute China as a factory of the world? -An analysis.

[mattster]

Vietnam, Indonesia and Bangladesh can at the most be the manufacturing hub of low tech items or something higher than that. They can not produce high tech goods or develop high tech products.

Wrong, dont put Vietrnam in the same bucket ad Indonesia and Bangladesh. Vietnam will eventually ellipse Malaysia and even Singapore.

 

[HariPrasad-1]

Wrong, dont put Vietrnam in the same bucket ad Indonesia and Bangladesh. Vietnam will eventually ellipse Malaysia and even Singapore.

Can vietnam, BD etc produce planes, hi tech capital goods, space craft etc?

 

[HariPrasad-1]

Yesterday, I listen to an interview of Rakesh JunJun wala with Arnab Goswami. He said that India will grow at an average rate of 10% for a decade to a decade and half from 2025 onward.

 

[no smoking]

Yes and No.
ASEAN countries most certainly will enjoy higher industrial growth than India their economies being more open than ours (they don't have so many local companies or capitalistic class like us which we have to defend from foreign ones). Their only focus is economic growth. So, global companies will produce everything there. Meanwhile our goal is self sufficiency, our goods will be mostly built locally by our firms.

No that simple.
India has been implementing this kind of self sufficiency policy since 1947, it lead to nowhere. Why, because the local capitalistic class just thinks the same way as those outside: maximizing profit at lowest risk. They will always soon turn to importing cheap foreign goods to sell domestically (importing foreign components and assemble domestically), unless they can get great subsidies from government.

There is a big factor, India's population and consumer class which will hold a bit of momentum here is large population and expanding middle class.

This exists in almost every developing country.

Further, we have an edge in couple of high-end industries over SE Asia i.e. aerospace, heavy engineering and space industry.

On the contrast, that will be India's burden for decades: they can always import from other countries at cheaper rate for better products. In the meantime, India has to spend huge R&D cost and subsiding the local manufacturers.

Consumption will always drive us ahead and we can also surpass ASEAN if we lift import duties after gaining self reliance. Our demographic factor remains for decades.

Demographic factors?

Chinese government has been trying everything to slow the Chinese companies (especially state-owned) to replace their workers with automotive machines for almost 10 years.

I just can't imagine how India government is going to deal with this competition between men and machines in the incoming AI era.

Since strategic factories aren't shifted rapidly or even shifted at all for many reasons, they will always remain in west and their eastern counterparts will always remain in Russia, China, India & Japan and SE Asia.

Again, for very very long time, these so called strategic factories are only producing loss for countries like China, India and Japan. Small countries like SE Asia don't need these.

 

[Indx TechStyle]

No that simple.
India has been implementing this kind of self sufficiency policy since 1947, it lead to nowhere. Why, because the local capitalistic class just thinks the same way as those outside: maximizing profit at lowest risk. They will always soon turn to importing cheap foreign goods to sell domestically (importing foreign components and assemble domestically), unless they can get great subsidies from government.

Opening economy isn't just the only simple factor of economics. Building a base for an ecosystem is required at initial stages for seeding industries.

If India from 1950s and 60s when knowledge infested in Indian society about knowhow any technology, any reform like 1991 would rather have turned India into a mess. India can open economy after a short while once ecosystem falls in place.

This exists in almost every developing country.

800 million purchasers aren't a thing in every developing country.

I just can't imagine how India government is going to deal with this competition between men and machines in the incoming AI era.

What would be the penetration rate of AI in heavy industries in next two decades. AI is yet away from making it men vs machines except in mass industry of commodities.

Again, for very very long time, these so called strategic factories are only producing loss for countries like China, India and Japan. Small countries like SE Asia don't need these.

I have told same. Small countries in Southeast Asia have their best case in remaining as pawn of other countries. India doesn't have same option.

 

[sunshine]

No that simple.
India has been implementing this kind of self sufficiency policy since 1947, it lead to nowhere. Why, because the local capitalistic class just thinks the same way as those outside: maximizing profit at lowest risk. They will always soon turn to importing cheap foreign goods to sell domestically (importing foreign components and assemble domestically), unless they can get great subsidies from government.



This exists in almost every developing country.



On the contrast, that will be India's burden for decades: they can always import from other countries at cheaper rate for better products. In the meantime, India has to spend huge R&D cost and subsiding the local manufacturers.



Demographic factors?

Chinese government has been trying everything to slow the Chinese companies (especially state-owned) to replace their workers with automotive machines for almost 10 years.

I just can't imagine how India government is going to deal with this competition between men and machines in the incoming AI era.



Again, for very very long time, these so called strategic factories are only producing loss for countries like China, India and Japan. Small countries like SE Asia don't need these.

That's not true. The Chinese government is not doing that. Instead, it's pushing hard for factory automation and commerce. For example, the latest port invested by the government is fully automated.
Public hospital registration booking fees are also all electronic, reducing a large number of manpower. Now it is difficult for factories to recruit workers, so enterprises are also mechanized. The education system has squeezed high school enrollment, hoping that half the kids will go to vocational colleges instead of high school and college. The number of front-line workers is decreasing, and production has to be automated.

 

[SanjeevM]

Australia Rejects To Be A Part of China's BRI And Cancels Projects - What Next Is In Store?

 

[SanjeevM]

BREAKING : China's New Focus is Japan: Strategic Shift or Desperate Search for a Winnable Front? #ChinaThreatensJapan "Do not provoke #China; once something goes wrong in the #Taiwan Straits, stay away or else you are asking for a beating." #BreakingNews


The way China is threatening different countries, it is not far that all these countries will stop trade with China and shift to India for business.

 

[HariPrasad-1]

Australia Rejects To Be A Part of China's BRI And Cancels Projects - What Next Is In Store?

China's arrogance gets them more enemies than friends. They think that they are hyper power and they can dictate the terms but infact they can not. Vietnam, India, Philippines, Australia, Japan, Magnolia etc doesn't listen to them. Their warning is not taken seriously.

 

[FalconSlayers]

ASEAN will be factory of the world, not India.
Most of the “Factory of World” prerequisites are not in GoI control, i.e willingness of foreign investors to put down the big bucks long term and shift their supply chains here, it is because of these (((external factors))) that India factory of the world isn’t possible .

Seriously? Asean‘s population is already greying fast.

 

[FalconSlayers]

Motorcycles are a sunset industry in China, and most Chinese cities have banned the issuance of motorcycle licenses.
China's domestic motorcycle sales are declining year by year.

You guys have started getting a western feel that bikes are for poor, lol. Go to anywhere in the world 2 wheelers are used. In India a lot due to our demographics.

 

[shade]

Seriously? Asean‘s population is already greying fast.

Rest of them maybe, Indonesia no.

 

[FalconSlayers]

The quad, European Union India deal which is in the pipeline etc can screw china good.
Govt of India need to work strongly on all these open cases despite the covid distractions.
china needed to be taught the elephant can not only dance but moonwalk over china despite what china throws in its way.

EU deal will screw not just china but also pakistan as well, their main export is textiles and after latest TLP gandmasti in paxtan, Indian textile exports can outshadow Paxtan and Bangladesh.

 

[FalconSlayers]

India won't be a world factory, but India will be self-sufficient. Most of the things it needs will be locally made, of a higher quality than China, and western investors will eventually see India as a manufacturing springboard to better address MENA (Middle-East and North Africa), and East/Sub-Saharan Africa. This will be driven mostly by American companies desperate to undercut Chinese ones.

The biggest challenge India faces now is not of policy, infrastruture, capital, or labour; but shipping.

India doesn't have one big shipping company of its own with super-size shipping vessels. SCI is a joke. We mostly rely on European shipping companies for the bulk of our international trade, and even our oil/gas.

Congress must be credited for creating Concor. It at least helped India cut container/handling costs. Containers aren't just big boxes of metal, they're sophisticated pieces of machinery that aren't cheap, and expensive to track and maintain. Right now Concor faces the same problems as any shitty PSU. It should be privatized.

Next, any Industrialist with a ton of money to spend should enter the shipping business. Operate Panama-registered vessels if you have to, but be an Indian company. This will make our products significantly more competitive in the global markets, because we'll have greater control over the shipping costs. Right now, chicom shipping companies are able to undercut even European ones at greater distances. This directly impacts prices of Chinese commodities.

India will become an alternative to the world, its not that Manufacturing only happens in China which is world’s factory, it happens everywhere. ASEAN is greying and is full literally.

 

[FalconSlayers]

Rest of them maybe, Indonesia no.

Indonesia? Indonesia’s population is less than our Uttar Pradesh State.

 

[no smoking]

Opening economy isn't just the only simple factor of economics. Building a base for an ecosystem is required at initial stages for seeding industries.

If India from 1950s and 60s when knowledge infested in Indian society about knowhow any technology, any reform like 1991 would rather have turned India into a mess. India can open economy after a short while once ecosystem falls in place.

It is not about knowhow or ecosystem but the comparative advantage and making profit in national level.
Industrialization requires huge investment in every stage. Developing countries don't have that kind of money, so you either borrow it external or based on your own people's bank savings. No matter which one you choose, you need to quickly turn your international trade into surplus to earn external profit to pay off your external debt and internal debt. Self sufficiency can't do it because in most of areas domestic industries won't be able to compete with foreign competitors. So you have to subsidize them with taxpayers money. But since you are a poor country, the subsidies won't be enough for these industries to thrive but only survival. After a period of time, you find yourselves in a circle: borrowing money -> subsidizing those industrial losses -> borrowing money.

This policy was implemented by South Americans in last 60s and 70s, which ended up as a disaster.

800 million purchasers aren't a thing in every developing country.

Yes. But with regionalization, other developing countries can easily build up a market far bigger than that.
ASEAN, for example, themselves get around 0.6 billion population already, further with RECP, they can easily access another 1.5 billion market.

What would be the penetration rate of AI in heavy industries in next two decades. AI is yet away from making it men vs machines except in mass industry of commodities.

Giving you an example: in one of Chinese textile company, in the past, one production line, 1 person worked with 2000-3000 ingots. In the latest production line, with help of AI, every person can work with 20,000 ingots. Roughly, they cut the shift of 60 workers to 6.

 

[no smoking]

That's not true. The Chinese government is not doing that. Instead, it's pushing hard for factory automation and commerce. For example, the latest port invested by the government is fully automated.

In early 2000s, one of Chinese state-owned companies sent a delegation group visiting the factory in USA. My friend was a member of the visitors. They concluded that they can reduce 60% of their workers with the same management system and technologies. They submit their report. The reply was: no, keep them.

Public hospital registration booking fees are also all electronic, reducing a large number of manpower. Now it is difficult for factories to recruit workers, so enterprises are also mechanized.

No, it is difficult for factories to recruit SUITABLE or SKILLFUL workers. With mechanization, the required knowledge and skills of the workers are not lower but higher. But the problem with developing countries (no matter China or India), a relatively big part of labour pool is low skilled.

The education system has squeezed high school enrollment, hoping that half the kids will go to vocational colleges instead of high school and college. The number of front-line workers is decreasing, and production has to be automated.

No, it is opposite: because the production is being automated now, the workers skill and knowledge needs to be upgrade as well. In the past, a worker only need to know how to use the machine. Now, they need to do a bit programming, simple maintenance, etc. In the past, a few month training is enough put a primary school graduate into work. Today, the threshold is much higher, they need much longer vocational education.