@
liall Let me put my point in detail. China's economic boom is mainly due to Infra with in China , Export- Cheep labour force in turn cheep goods , Undervalued Chinese currency etc. These are three main pillar of chinese growth for the past 40+ years or so.
Now what is wrong with China's economy today and in future ? : Since chinese already invested many billions perhaps trillions into building NEW CHINA. Its already the best in the world. But whats is happening now is What will happen to the millions of labour force who worked for these infra projects if there is no more new projects. I say no more it means decrease in such projects. So china is adopting new way to get these labour force paid.Do you know what it is ? Destroy the newly built building and Bridges and built a new one
Am not making it up but its true. So from now on Chinese are messing it up.Just to keep their Job Security afloat. Will it work? May be for a while but not in long term.
Major problem China is and Will face is its aging Chinese population. I dont kn ow about Canada but Sure u know abt USA's pension problems. Its a big Frankenstin monstr for any Nation. China will have the world's largest old population in the world. Thanks to chinese medicare
Now lets come to ur analysis on Production : You , Me or anyone will buy chinese products not because its of good quality but because its cheep. Just google it on protest taken place in China by Workers to increase their wages. Today china is developed
(-) Minus country . To be fair. Its still not a developing. Chinese economy boost increased the demand for HIGH LIFE STYLE. More and More people now want highly paid jobs but before they wr happy to work for cheep Pay. This will leads to increase in production price. Which will challenge Chinese products at global stag. If am understood properly You said the same i guess. But you are naive to the facts that Its the also the problem caused due to all arround Problems of CHINA. Hope you will change ur thoughts on Chinese Bubble Growth waiting to burst. China need to move outside its border and for infra projects to keep their economy afloat. Now China's GDP is 7.5% and it is ment to decrease in comming years.
Sure India will keep cashing IN,.So far India is been a Service Hub not the Manufacturing Hub. But now Indian Bussiness Community inside and Outside India wants the Govt of India to have good and Sensible response towards Manufaturing Sector. India will have nearly 600 Million under 27-35 which will be so till 2050 or 2070 . So India got huge working population , Money , Resources What else We need for a Next Super Hub for Industries ? Companies are very cleaver and Known about these fact they are starting invest more into Indian Economy. Its 1.2 Billion people ready to spend their Money . Its win win for both Consumer and Seller . Its great future for India . I really belive. India just need a Decent Well educated, Development oriented Leader To Make Use of this great Advantage India Has . Hope It will be Narendra Modi in 2014
This is a very dumb "explanation"
, appearing mainly in western main stream media originally written by some folks with next to zero knowledge on finance and int'l trade, being recycled later on endlessly by people with avg IQ typically below 85. Let me debunk it briefly.
Here is why:
1. Aging is NOT a problem for CHina, AT ALL, when look at it sriously. So called China´s aging problem is merely a Western propaganda, a feel-good mass media brainwash tool, used to counter China´s oeverwhelming int´l market recognition and monoply.
Many easy solutions for that, when needed only, some really quick. it's because
A, China still has many large reserved population in the west region
B, productivity and new tech such as more and better robots are increasing (both factors require high average IQ and sheer discipline and diligence of the underlying hard-working work force) by leaps and bounds so that the same worker tomorrow can produce more and even better goods with the same input.
C. China can relax 1 child policy any time as it sees fit.
2. there're many more and better ways to get China's workers paid, other than "Indian style" of destroying the old ones and rebuild.
This is because
A, The Western part and the Northern part of China alone require decades of work/investments on infras to be as world class as their counterparts in the East and South.
B, due to high average IQ of Chinese population, increasingly better avg education level, (evidenced both PISA and TIMSS) enables an average Chinese worker a fast track to increase self-worth in the int´l market (evidenced by fast increase of avg salary) thus increasingly competing with ones in the higher value chain.
3. any natural loss of Chinese manufactory export to a third country is a VERY GOOD thing for China as a whole and in a long run.
This is because
A. any such a loss will reduce the corresponding bad side effects such as pollution which in the long term would take much more than temp profits gained to clean up. so the Chinese will benefit with cleaner environment, better quality of life and life span.
And B. such a loss will act as a catalyst forcing its work force to step up into higher value chain in int´l mkt, which is mostly based on higher value added activities based mainly on owning large No. of technology patents (evidenced by China´s overall patents and stunning annual avg rate of growth which is still on going strong!)
4. the lost exports will mostly likely go to SE Asia such as Vietnam, Thai, Malaysia, Indonesia rather than to India. The reason is fairly simple, for any IQ larger than 90 of course- it´s because
A. The will-be-lost, and many-already lost, exports are mainly very low value added and heavily polluted productions such as simple snickers, t-shirts, socks, simple tools, etc. that China is unwilling to accept to be shifted into her west regions. These items, as any others, require their own eco system to survive. Many parts of SE Asia, being at least 15 years ahead of India in industrialisation, have already have these in place. No company is willing to invest on its own on basic and reliable infras needed in India, the loose, lazy work ethics and low (hence more expansive )entry level training of avg indian work force aside.
And B. due to heavy overseas Chinese presence and traditional networks, these SE Asia countries have very good management on the top (usually being some Han Chinese)and less lazy but more intelligent avg work force in the middle and at the bottom (with avg IQ from mid/high 80s, to mid 90s such as northern Vietnam), in comparison to India. India just can not compete with them.
So all in all, any calculated / deliberate loss of China’s export will directly and almost exclusively benefit the nearby SE Asian countries, before perhaps some Latin American countries kicking in... India is WAY back in this packing order due to A. low avg IQ and utter corrupted top `high` caste Indian management. B. low avg IQ and quite lazy Indian work force below it.
5. Dumb people usually think that Labour cost = Production cost.
Heck NO!
Salary in low manufacturing business is usually about
10% with mid-high level less than
only about 7 % of the total production cost! The bigger parts are material cost (shot up by associated hardware/infras), basic hardcore and soft infras depreciation!, transport(again, infras!), management, etc.
In many cases even China´s workforce 2X or 3X more expansive than today, the unit cost , aka competitiveness, it enjoys is still overwhelming compared to India even helped by much much lower labour costs, due to much higher productivity, perhaps 20X larger, fuller, more mature and thus better economy of scales and associated countless mini eco systems,
and perhaps most importantly 10X more disciplined, diligent, flexible and ambitious work force with avg IQ at least 2SD higher, which make possible highly fluent, efficient and hence constantly and quickly improved work flow, quality control, on-the-job training, upgrades of production lines, timely delivery, trust/brand building, etc. etc. that exemplify the very essence of what is 21st century manufacturing.
...
NO NO, genius, there are at least 10 friggin entire icebergs in the “world of competitiveness ” beneath that simple and tiny “labour cost”, otherwise countries such as Germany would have gone busted long ago as German labour cost is amongst the highest in the world.
And in that full picture, India’s future is much dimmer than ANY banana republic of the day, to be frank --- e.g. the PISA performance of avg 15-year-olds from Panama Republic, a below avg figure amonst banana repuclics, was infinitely better than the 2 of the best Indian states on ALL accounts: science, math and reading, almost like pitting a smartend-up Arnold Schwarzenegger against a retarded Danny di Vito.
, according to research by Bloomberg.
