Not Possible to Industrialize Like China

[Martian2]

China's economic growth for 2017 was 6.8% and India's was 6.7%. That means both economies are doing well, right? Not quite.

Firstly, India's population is growing. About 1% of India's economic growth comes solely from population growth, which is not sustainable. Indian cities are already overcrowded.

Secondly, the quality of the growth means India will hit a wall economically.

Take a look at Forbe's chart of China's and India's top export categories (see below).

China's top export categories are computers, telecommunications equipment, telephones, integrated circuits, and light fixtures (LEDs?). These are high value-added products.

China is expanding into consumer and military drones, computer memory chips (3D NAND and DRAM), passenger jet aircraft, industrial robots, AI, self-driving cars, electric vehicles, etc. These are also high-value products.

China's future economic expansion makes a lot of sense and it's all high-tech.

However, India's top export categories are refined petroleum, diamonds, jewelry, packaged medicines, and automobiles. Aside from automobiles (or is it really auto parts?), there is no place for India to go. Indian exports are mostly low-tech with no room for expansion. For example, diamonds and jewelry are not scalable (which is very different from computer DRAM chips).

In conclusion, while India may grow economically at 6.7% for a few more years, it will eventually slam into an immovable economic wall. There is limited demand for diamonds and jewelry. This phenomenon is typically called the "low income trap" or the "middle income trap."
----------

India Will Outgrow China In 2018, But Must Invest In Next-Generation Value Chains To Succeed | Forbes (January 2, 2018)

"The real long-term challenge for India isn't the size of its exports, but the structure of its exports.
...
To see India's challenge, just look at its top export industries: petrochemicals and jewelry....India's second big export industry is finished jewelry, which like petrochemicals is a one-time value-add play with no potential to power real economic transformation.
...
It is difficult to see how India could break into -- let alone climb -- the kinds of major global value chains that could bring truly transformative economic growth."

 

[Thanatos]

This is true, no comparison at all atleast for next 3 decades. This bubble of ndian economy would burst one day, just the other day we saw 79% of wealth in india went to just 1 % of the population. Over the next one decade we ll see where india stands, indians try hard to compare numbers all the time. Those could be deceptive. However if a country wants to remain in denial , why would any one else be concerned, ultimately its the people of india who are suffering.
However if indians still think that they are super power in making, good luck to them. Not gona happen in the next 50 years atleast.

 

[Azadkashmir]

permanent rich for one group and permanently poor for another.

 

[faithfulguy]

India ignores manufacturing and development because it wants to skip manufacturing and go directly into high tech.

It also believe that China will crash soon and India will take over.

 

[TaiShang]

However, India's top export categories are refined petroleum, diamonds, jewelry, packaged medicines, and automobiles. Aside from automobiles (or is it really auto parts?), there is no place for India to go. Indian exports are mostly low-tech with no room for expansion. For example, diamonds and jewelry are not scalable (which is very different from computer DRAM chips).

Indian automobile exports are extremely low end. Basically tin boxes with no AC and airbags.

 

[AndrewJin]

India ignores manufacturing and development because it wants to skip manufacturing and go directly into high tech.

It also believe that China will crash soon and India will take over.

I can't believe such strategy that is usually used in smaller countries is adopted in a country of 1+ billion people.
Unless to the First Class Indians they just have 100 million people instead of 1.2 billion.
First india vs Second india
@Bussard Ramjet

 

[Martian2]

I can't believe such strategy that is usually used in smaller countries is adopted in a country of 1+ billion people.
Unless to the First Class Indians they just have 100 million people instead of 1.2 billion.
First india vs Second india
@Bussard Ramjet

I think the Indian strategy is rational.

India will never beat Huawei in telecommunications equipment. In fact, Huawei outcompeted Ericsson.

India will never beat DJI in consumer drones. GoPro lost to DJI.

Alibaba beat Ebay in China.

Didi Chuxing beat Uber in China.

India is smart to stay out of China's way. It would be a losing battle. The problem is India has not distinguished itself in software. It has to fight IBM, Oracle, and Microsoft.

Whether it's China in hardware or the US in software, India has a big problem. How do you compete against the world's two most competitive economies? I'm not sure there's an answer to this dilemma.

 

[AndrewJin]

I think the Indian strategy is rational.

India will never beat Huawei. In fact, Huawei outcompeted Ericsson.

India will never beat DJI. GoPro lost to DJI.

Alibaba beat Ebay in China.

Didi Chuxing beat Uber in China.

India is smart to stay out of China's way. It would be a losing battle. The problem is India has not distinguished itself in software. It has to fight IBM, Oracle, and Microsoft.

Whether it's China in hardware or the US in software, India has a big problem. How do you compete against the world's two most competitive economies? I'm not sure there's an answer to this dilemma.

It seems like a failed battle from the very beginning....
They chose the better among the worse?

 

[Menthol]

This is true, no comparison at all atleast for next 3 decades. This bubble of ndian economy would burst one day, just the other day we saw 79% of wealth in india went to just 1 % of the population. Over the next one decade we ll see where india stands, indians try hard to compare numbers all the time. Those could be deceptive. However if a country wants to remain in denial , why would any one else be concerned, ultimately its the people of india who are suffering.
However if indians still think that they are super power in making, good luck to them. Not gona happen in the next 50 years atleast.

That is why I explained to Indian members here about the quality of economy development. But they stuck with the number, as you mention it too.

 

[ohmrlobalobayeh]

India ignores manufacturing and development because it wants to skip manufacturing and go directly into high tech.

It also believe that China will crash soon and India will take over.

this game sums it up. I have personally played this game myself and it is through it that i visualized how China manage to transform into the economic powerhouse that she is today.

Industry

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Industry is one of the two main business categories. It is divided into Food Industry, Heavy Industry, Manufacturing, and High Tech, with the latter three divided into Low, Medium, High density, and Exceptional. Exceptional includes special buildings that work to increase the efficiency and profitability of it's corresponding lot.

Contents
[show]
Food Industry
Food Industries work differently to most other lots. It must be built in designated agricultural areas on certain maps, and works by defining an area where the farm will go. All types of farm function exactly the same, only differing in aesthetics. Silos can be built after every ten farms, which creates a circle of influence, increase the profit of each farm. Fertilizers further the increase even more, and can be built after every five silos, meaning fifty farms.

Heavy Industry
Heavy Industry are the starting industries the player can work with. They are the easiest to build requiring only unskilled workers in low densities. However, they are also the greatest polluters, which must be kept away from the wealthy Executives and Elites, and also other lots that depend on an environmental rating such as offices and High-Tech.

Manufacturing
Manufacturing is the next step in industry development. They begin hiring skilled workers in their labor-force, produces slightly more in profit than Heavy Industry, and less pollution. However, unless you import Heavy industry, it is not meant to be a replacement for heavy industry, as it depends on it as a bought resource.

High Tech
High Tech is the last step in industry development, hiring executives and elites to run their company. It produces the most profit and has a zero pollution ratio. It is also very intolerant of pollution, meaning it should be built in either a specialized "clean" city or kept some distance away from pollution sources. It uses a large amount of resources and buys in manufacturing as a resource.


http://citiesxxl.wikia.com/wiki/Industry







1)Basically, the 'food industry' in the game can be translated as the agricultural sector of a nation. This is the most basic industry of any self-sustaining country. You grow your own food to support your population and aims to export surpluses. This sector earns little profits. All major nations of the world in modern times are in 1 way or another; agriculturally-independent.

2)From here, one progresses to the next step of developing a 'heavy industry' that can be translated as procuring and producing raw materials(ores, metals, etc). Without this basic sector, no nation can ever expect to be self-sustaining.Mother nature plays a part here because a nation must be endowed with natural resources as well(Iron, copper, zinc, lithium, tungsten, rhenium, uranium, bauxite, phosphorus, oil, natural gas, etc). Big superpower nations are usually endowed with lots of them because of their gigantic territorial landmass.

Without this crucial industry, no nation can ever expect to industrial sustain ably and effectively because u r missing the materials u need to proceed to the next step- 'Manufacturing industry'. It is because of critically lacking this 'Heavy industry' sector that drove some nations into other means of building them up. Nazi Germany and Japan are the prime examples- they resorted to invasion of other countries in order to obtain those raw materials for their manufacturing industries at home.

3)'Manufacturing industry' is the major sector that decides whether a nation will be a truly self-sustaining one. You produce your own consumer goods and export surpluses. This is where China excels in(while also fulfilling ALL the sectors before it as explained above- something Germany, Japan, South korea all failed to fullfill). A nation builds up her 'Critical mass' based on this sector. Only then can we go on to the final step:

4)'High-tech industry' = R&D sector. Only with an abundance of manufactured goods(which by itself, will have to depend on the heavy industries that provide the raw materials to produce them) can a R&D sector start to flourish. Otherwise, a nation will suffer a 'capital leak' and keep importing them.

5)Only by building all these sectors up, step by step- can then the 'services sector' aka commerce industry finally come into the picture.

Banking, accountancy, audition, engineering, offices, tourism, etc. They dont provide any physical goods. Instead, they provide services in support of the true industries(agricultural, heavy, manufacturing, hi-tech, etc)

This sector is where India wants to excel in, but is short-sighted in not realizing that there needs to be industries in the 1st place for their services sector to sell to. It's a step-by-step procedure:

growth of industries sector => growing demand for more services => growth of services sector

The US took this steps. The USSR took this steps(even though they ultimately failed). China took this steps.

U can never fly without learning how to crawl first.

http://citiesxl.wikia.com/wiki/Offices

Offices are a type of industry (which makes sense in Cities XL game-play, despite not making sense in real world). The difference with other industries is, of course, that Offices don't produce goods, but instead produce services (theresource known as 'Office services'), which are mainly used by Industries.

Office buildings include a wide variety of companies that you can find in those tall, modern-looking buildings: banks, recording studios, financial companies, trade unions and so on. The offices are the source of your city's largest and most impressive skyscrapers, and by using them together with the executive's skyscrapers, you can achieve a very modern, Manhattan-like skyline.

Offices are a 'clean' industry, meaning that they have no negative effects. Like High-tech Industry, they benefit from Quality of Life (that is, Environment), so build them away from pollution (both air and noise). Also, they benefit from Passenger services, so they need to be close to a big inter-city connection source.

Offices also need the services of Business Hotels, which provide lodgings for the many business travelers that the companies receive.







Without an industry to target, who are u gonna sell your services to ? sole reliance on exporting call centre services? Indians often like to pride themselves as being 'strong in software services'. Question is; without an industry at home to sell those 'software services' to, how is domestic software services going to grow? Overseas? and be at whim on others who may or may not even need them?

 

[rcrmj]

I have been to India, and said many times on here that their economy is seriously stuffed, it has no solid ground for a long term and healthy growth.

Firstly: their money and financial markets' "health" condition is very much dependent on foreign direct institutional funds and international lender's interests. As the former only seeking to speculate on short term return, has no interests on India's long-term investment;

and the latter one is even worse, do you know India is paying the highest interest rate around 8% to those Dollar and Euro lenders world wide? they are basically raping India off, well it is India itself to blame, as it has no leverage in negociation and India's international creditability is very bad! (ask any traders they will tell you the truth)

Secondly: their social and economical development level is still at primitive factor driven stage, from WIPO's nation's annual competetiveness report, so its economy is quite linear along with its weather and energy price. Bad weather and high energy price would bring huge risk to the stability of its economy

Lastly: well it is just my own opinion. we all know India's GDP is less than 1/5 of China's, many people think its huge, and wont widen further in future. However, when you compare their daily consumption on classic middle-class goods and services, you would find the gap between us is even much wider than most people would imagine!

for example, classic high quality commercial cars, price ranging from $40K - $100K, China's market is at least 10 times bigger than India, and luxury cars, price starts from $100K plus, is even more staggering at 20 - 30 times! the scale of the gaps are quite consistant in the areas of high quality garment, luxury accessories, bags, appliances, high quality food and house furnishings! These are considered as the classical indication on a nation's economical well beings.

and regarding the education sector, we all know Chinese and Indian families put lots effort on kid's education. However the picture is quite different, in China the market scale is close to $1.2 trillion and still growing (public funds are not included), India is only a fraction of it! in China schools are mostly public funded, so our kids tuition fees are a fraction to our imcomes, like $50 per-month (books, food, uniforms are all included), however, the AVERAGE Chinese family will spend $300 per month on kids after school trainings or interest groups. And this money is almost the same as India's middle-class monthly income, but well over to India's own definition of "middle-class" at the bar of $5 per-day.

Therefore, I would say, to any none-delusional and analytical minds, it is very easy to work out the real India's economy is much smaller than the reported one. I would say $1 trillion useful GPD at most

 

[phancong]

Back in the early 90’s India claimed manufacture jobs were beneath them. Majority of Indian so smart they were only want to become medical doctors or science related field and concentrate on service sector to generate economy expansion. Indian were too poor to spend on self indulgement, without middle and high class India population unable generated much business for India service industry expansion. Indian need food and no money to indulged in luxury. 1 billion Indian fought over each other to serve 1 percent rich Indian, bypassed low labor manufacture over three hundred millions Indian still live below the poverty line. These poor uneducated Indian won’t qualify to work in a simple low skill manufacture job.

 

[Daniel808]

China's economic growth for 2017 was 6.8% and India's was 6.7%. That means both economies are doing well, right? Not quite.

Firstly, India's population is growing. About 1% of India's economic growth comes solely from population growth, which is not sustainable. Indian cities are already overcrowded.

Secondly, the quality of the growth means India will hit a wall economically.

Take a look at Forbe's chart of China's and India's top export categories (see below).

China's top export categories are computers, telecommunications equipment, telephones, integrated circuits, and light fixtures (LEDs?). These are high value-added products.

China is expanding into consumer and military drones, computer memory chips (3D NAND and DRAM), passenger jet aircraft, industrial robots, AI, self-driving cars, electric vehicles, etc. These are also high-value products.

China's future economic expansion makes a lot of sense and it's all high-tech.

However, India's top export categories are refined petroleum, diamonds, jewelry, packaged medicines, and automobiles. Aside from automobiles (or is it really auto parts?), there is no place for India to go. Indian exports are mostly low-tech with no room for expansion. For example, diamonds and jewelry are not scalable (which is very different from computer DRAM chips).

In conclusion, while India may grow economically at 6.7% for a few more years, it will eventually slam into an immovable economic wall. There is limited demand for diamonds and jewelry. This phenomenon is typically called the "low income trap" or the "middle income trap."
----------

India Will Outgrow China In 2018, But Must Invest In Next-Generation Value Chains To Succeed | Forbes (January 2, 2018)

"The real long-term challenge for India isn't the size of its exports, but the structure of its exports.
...
To see India's challenge, just look at its top export industries: petrochemicals and jewelry....India's second big export industry is finished jewelry, which like petrochemicals is a one-time value-add play with no potential to power real economic transformation.
...
It is difficult to see how India could break into -- let alone climb -- the kinds of major global value chains that could bring truly transformative economic growth."

Well said, my friend @Martian2
Another great thread

@HannibalBarca @Georg @F-22Raptor

 

[Sh@msu]

call center economy be it 7 or 17% GDP is never going to match any manufacturing superpower.
This includes my own country.There is no easy skip,you want to be recognized as a powerful nation you need to get your hands dirty to learn to make everything from scratch.
These call center GDP is nothing but pure BS.

 

[TaiShang]

3)'Manufacturing industry' is the major sector that decides whether a nation will be a truly self-sustaining one. You produce your own consumer goods and export surpluses. This is where China excels in(while also fulfilling ALL the sectors before it as explained above- something Germany, Japan, South korea all failed to fullfill). A nation builds up her 'Critical mass' based on this sector. Only then can we go on to the final step:

4)'High-tech industry' = R&D sector. Only with an abundance of manufactured goods(which by itself, will have to depend on the heavy industries that provide the raw materials to produce them) can a R&D sector start to flourish. Otherwise, a nation will suffer a 'capital leak' and keep importing them.

5)Only by building all these sectors up, step by step- can then the 'services sector' aka commerce industry finally come into the picture.

I think China is now working on the step 4 and laying the ground work for the step 5.