u need a lesson in economics .....
china surplus is a result of pegging to us dollar ..... a currency manipulation (actually it is a form of stimulus) to increase export which US is protesting about.Now that chinese currency is being revalued slowly and it aprreciate against dollar and euro ur economy will face a bigger shock coz a export driven economy cannot have a strong currency..
earlier u used to get 1$= 8 yuan now its 6 yuan approx so as ur currency appreciate ur export will become costlier means less production means less jobs growth which in turn means slower economy+ aging demographics+largest manpower
Now Come to india Our Rupee has depreciated 7% in last 3mnth against $ that itself is a stimulus for export even when indian econmy is largen domestic consumption driven mkt .... more export means more jobs means more growth+ young demographic+ second largest manpower
Although weak currency is not good coz it can lead to inflation as u have been seeing in both countries but if u use it wisely its can serve to stimulate economy promote job growth ....
with weak currency ur imports becomes costlier
So to tackle currency changes China needs to become consumpotion driven economy and India a export driven....
now tell me which countries future looks bleak....
LMAO, no wonder the entire indian economy is a total ponzi scheme, because none of the gullible indians understand basic macro economics.
economics is driven by savings, manufacturing and investment and underconsumption. not by debt based consumption like india. india is getting poorer as its gdp is rising as its debt is rising faster than gdp growth, its getting its gdp growth because its going deeper into debt. thats a classic ponzi scheme.
china is not an export economy, its a manufacturing economy, china can retool its manufacturing to produce to the domestic market. that is already happening. and ur nutty theory that weak currency means loss of competitivness is utter nonsense, japans yen was 360 to the dollar 30 years ago and its 80 now, but japan still runs trade surplus with the world. china's yuan was at 8 now its at 6.35, but china's trade surplus has risen even higher during that currency appreciation in absolute numbers aswell as % of gdp. during that currency appreciation china became the largest exporting nation in the world, even with a stronger currency.
china's reserves are because of trade surpluses of $200 billion every year plus forex intervention.
india runs massive trade deficits, massive budget deficits and has a very high debt to gdp %.
when a country goes into debt to get growth, ur headed for economic ruin. u dont run service sector economies with a per capita gdp of the size india has, service sector economes are wealth consuming, manufacturing sector is the wealth producing.
india's so called domestic consumption economy is a ponzi scheme. its debt based consumption just like greece. the only reason u can consume products u dont make is because u go into debt to do that, u cannot run massive trade deficits and prosper.
if india is to grow it has to go deeper into debt, and if india decides to stop going into debt, then indian growth will collapse as the only way india can grow is by going into debt to run this debt based consumer economy like greece. india dont have a manufacturing base to produce the goods. if. u dont have consumer driven economies and service sector economies with a per capita gdp of $1000 like india. indians cannot afford to consume these goods without borrowing money and increasing the debt burden as they dont have the disposable income to consume with their own money, thus they have to borrow. china dont need to go into debt to consume as china has its own savings, china is thus living with its means whereas india is living beyond its means ala greece.
india has a massive population growth problem as it doesnt have the resources to supply the fast growing population, india still has not figured out that having a massive population is a problem. china figured this out in the 1970s, thats why china introduced the one child policy, china knew the drain of the national resources of supporting an ever increasing population.
soon india will realise this and introduce a one child policy. indians are very ignorant and primitive humans, they are behind in the human evolution chain. thus it takes indians a while to figure out problems.
china has the 3rd largest consumer market in the world, china consumes way more than what india consumes.
china's consumer market is over $2 trillion, thats doubles the entire indian economy. lol, the chinese consumer market alone is twice as big as the entire indian economy and ur telling me chinese dont consume. go learn economics 101 before any indian rat lectures me on economics.
if u dont have a manufacturing base, ur screwed, america is finding that out.
china only needs to retools its products to its domestic market, thats a very easy thing to do. its happening already.
because china dont need to go into debt to consume its own products as china has the world largest gross national savings.
china has manufacturing base.
china has savings.
china can consume its own products.
china is now already the largest or 2nd largest consumer of many goods such as automobiles, PCs, smartphones, televisions, white goods, luxury goods, apparel, toys, aircraft, tablets, furniture, etc.
weak currency is not how u get exports u fool, then zimbabwe should be an exporting superpower.
there is no such thing as export economy.
its called being a manufacturing economy which can make products for the domestic market and the foreign market.
u have domestic consumption based economies only if u have balanced trade and domestic savings so u dont need to borrow money to consume, china can consume its goods without borrowing, india has to go into massive debts to consume goods u dont make and money u dont have.
businesses decide to manufacture in countries that have a pro-business environment. that means low regulations, low taxes, rule of law, easy access to capital, low cost of capital, low rent costs, low transportation costs, modern infrastructure(transport, communications, etc), etc.
its not just the labour cost that matters. otherwise africa will be manufacturing kings because african labour is free.
china provides this pro-business environment for entrepreneurs aswell as state subsidies and other incentives like no one else. thats why china is now the 2nd largest manufacturing nation, 2nd largest trading nation, largest exporter, largest creditor nation, largest forex reserves,3rd largest consumer market, 2nd largest industrial nation, 3rd largest tertiary sector, etc.
india is a debt based ponzi scheme which will have its greece moment in the future as this massive accumulation of debt is unsustainable.
india is one a one way street to economic ruin.