Rudra72930
Regular Member
- Joined
- Nov 15, 2022
- Messages
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One needs to have a tad bit understanding of economics, to clearly understood the crisis China is facing today. And I know many people here can better explain it to you.Good! We will see in 4 or 5 years time whether China collapses
Margins and ROE are important to individual wealth but they certainly aren't needed to "sustain" a large economy.
Electronics and high tech margins are not very low by any means. It might be low when they are commoditized (mainly by China itself through economy of scale.)
Blind rhetoric wouldn't change the fact.
Margins & Returns on Investment is how your financial system generates capital for reinvestment into capital intensive sectors like tech. This is how you finance your heavy incentives. Do you think CCP just prints money & hand it over to your industry.
One can survive with low margins & ROI but there wouldn't be any growth prospect.
You can sell your bullshit in some other forums. Agriculture contibutes only 16% of Indias economy, Services contibute 54% & industries 30% to India Economy.If that were case, India's economy would have collapsed. Agriculture is the biggest part of the Indian economy and agriculture has pitifully low margins.
The fact about Chinese products is that it has saturated the Global market & secured profitability through economy of scale.Electronics is what propelled Japan, Korea and Taiwan into the first world. China is in middle income with a good ways to go. It also was propelled by elecronics but China has a few more things that Japan/Korea/Taiwan don't have and that is a huge commercial space, nuclear energy and aerospace industries.
There is no scope of further scalability. So now your competing with same ROK, Japan & US. So you have to cut your margins further to maintain the competitiveness even at premier scale.
Which will lead to the same problem I have mentioned before.
The Aerospace sector is heavily capital intensive & one need international customers to be profitable. If the US & Euprean safety regulatiors refuse to give clearance to China passage planes, a part of their vendetta. The Chinese Aerospace sector will also not see profitability. There are many examples around the world that can be cited.
@ym888 if you have a statement to make your free to do so. Just blindly sharing articles doesn't provide any point.