PakPrinciples
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What you stated isn't necessarily true. In fact the article title Why India Will Displace China as Global Growth Engine is proven wrong by the stark reality that India's economic growth figures are consistently being reappraised and dropping.
India will definitely grow but definitely not at the speed people had incorrectly speculated would be the case.
This has nothing to do with the companies themselves but regulations imposed on them by their respective governments, particularly the US, which actually impedes their ability to grow and do business actually stifling the growth of the US economy.
For example, a recent story in the news was about Pratt & Whitney and Hamilton Sundstrand selling China software for the operation of the prototype engine in the WZ-10 attack helicopter. They had no problems making the sale and actually made quite a profit but the US government was very displeased and they were cited as having violated US law relating to such sales to the Chinese military and were forced to pay $75 million. So the US complains about large trade deficits with China but at the same time US companies are forbidden from selling their wares to countries like China which reduce that deficit.
Modern Submarines, ballistic missiles, nuclear bomb, etc... were all created by the Nazis and/or German scientists the US and other world powers at the time took hold of. People have always built upon the knowledge of others and that is how humanity continues to grow. Edison never invented the first bulb just the first commercially viable version of it so to say that the Chinese actually need to copy to come to the same conclusion is ridiculous. They will find their own way and now with an increasing GDP and more money available to spend on R&D they are coming out with some very innovative pieces of tech.
This is the result of China's one child policy. There has been talk in the government to do away with the policy especially since there are way more boys than girls. If they abolish the policy you can be sure that the problem will quickly correct itself. I am not entirely sure why the policy was initiated since it was obvious that with increased economic growth would come higher standards of living and people would live longer unless someone actually believed that the "elderly" would die off quickly (ex. in their 40s) so there would have been a smaller population of young adults left getting an increased share of the resources.
However, what I suspect it might have to do with China is trying to move away from being the worlds producer of cheap toys and electronics and actually branch out into creating world class products as well as increasing R&D to get a bigger share of the worlds intellectual property rights which does not require as many people and in fact is rewarded by having more elderly and experienced researchers/workers.
Ahhh... I knew this would come up at some point.
I cant see how India is a democracy considering when they refuse to give the Kashmiri people the right to decide their fate in a referendum.
However, even if that was not the case India like virtually all other countries are not actual democracies but republics where rules and regulations are setup to prevent the majority from getting their way to prevent the tyranny of the majority. However, the problem with all modern republics is that they still utilize a democratic process of electing candidates which have the authority to change the constitution whenever they see fit thus no one is ever guaranteed security or prosperity. It was Winston Churchill who said the best argument against democracy is a five-minute conversation with the average voter. How are the illiterate an uneducated masses of India, let alone any nation, supposed to elect knowledgeable, upstanding politicians? People look at the official literacy rate in India being around 75% but forget that to be considered literate you simply need to be able to read and write your name it doesn't mean you can read newspapers or write papers.
Furthermore, China's rise itself proves that democracy is not necessary for economic growth or prosperity.
This is just ridiculous.
If you look at PISA 2009 rankings the top spots are essentially held by countries that speak little to no English (with Shanghai, China taking top spots in every category):
Furthermore, the PISA results actually disprove the old myth that all Asian countries do is memorize and regurgitate knowledge but cant actually apply what they learned to real life situations. However, as you would expect you have those in the west who refuse to accept the reality that things are changing and they will no longer be number one.
And you seriously think this is a bad thing?
The years when governments, particularly those of the third and developing world, had stricter state controlled economies (i.e between 1950 to 1973) the world economy grew by 3% a year. However, the moment countries followed the advice the west gave them and neoliberalism was introduced (usually as a precondition for trade agreements and aid during a financial crisis) from the 1980s onward the world economy has only grown by 1.5% a year. In fact following liberalization of finance and trade we have seen capital inflows surge, you have cases of massive speculation, credit booms and asset bubbles as well as current account deficits which resulted in the financial crises.
Do not necessarily believe the advice the IMF and World Bank give since these are tools of the west used to keep them rich and everyone else poor.
What you are talking about is an outsource of the service sector which means nothing in comparison to China getting the outsource of manufacturing.
Service sector related jobs aren't secure since automated systems can be easily setup to replace them. Furthermore, they do not add to a countries technical capacity like manufacturing jobs (which go to China) would. For example, how much are you as a nation going to learn about building supercomputers by answering calls for Pizza Pizza or offering customer support for a company that retails body oils, office supplies, etc...?
Over the years from the outsourcing of manufacturing jobs also comes an outsourcing of capital equipment and technological know how. China has harnessed what it has learned and is now building upon that knowledge via the manufacture of various value added products particularly within the technological industry.
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That is my take on this subject. If anyone has anything to add or corrections they want to make I would be interested to read their point of view.
India will definitely grow but definitely not at the speed people had incorrectly speculated would be the case.
This has nothing to do with the companies themselves but regulations imposed on them by their respective governments, particularly the US, which actually impedes their ability to grow and do business actually stifling the growth of the US economy.
For example, a recent story in the news was about Pratt & Whitney and Hamilton Sundstrand selling China software for the operation of the prototype engine in the WZ-10 attack helicopter. They had no problems making the sale and actually made quite a profit but the US government was very displeased and they were cited as having violated US law relating to such sales to the Chinese military and were forced to pay $75 million. So the US complains about large trade deficits with China but at the same time US companies are forbidden from selling their wares to countries like China which reduce that deficit.
Modern Submarines, ballistic missiles, nuclear bomb, etc... were all created by the Nazis and/or German scientists the US and other world powers at the time took hold of. People have always built upon the knowledge of others and that is how humanity continues to grow. Edison never invented the first bulb just the first commercially viable version of it so to say that the Chinese actually need to copy to come to the same conclusion is ridiculous. They will find their own way and now with an increasing GDP and more money available to spend on R&D they are coming out with some very innovative pieces of tech.
This is the result of China's one child policy. There has been talk in the government to do away with the policy especially since there are way more boys than girls. If they abolish the policy you can be sure that the problem will quickly correct itself. I am not entirely sure why the policy was initiated since it was obvious that with increased economic growth would come higher standards of living and people would live longer unless someone actually believed that the "elderly" would die off quickly (ex. in their 40s) so there would have been a smaller population of young adults left getting an increased share of the resources.
However, what I suspect it might have to do with China is trying to move away from being the worlds producer of cheap toys and electronics and actually branch out into creating world class products as well as increasing R&D to get a bigger share of the worlds intellectual property rights which does not require as many people and in fact is rewarded by having more elderly and experienced researchers/workers.
Ahhh... I knew this would come up at some point.
I cant see how India is a democracy considering when they refuse to give the Kashmiri people the right to decide their fate in a referendum.
However, even if that was not the case India like virtually all other countries are not actual democracies but republics where rules and regulations are setup to prevent the majority from getting their way to prevent the tyranny of the majority. However, the problem with all modern republics is that they still utilize a democratic process of electing candidates which have the authority to change the constitution whenever they see fit thus no one is ever guaranteed security or prosperity. It was Winston Churchill who said the best argument against democracy is a five-minute conversation with the average voter. How are the illiterate an uneducated masses of India, let alone any nation, supposed to elect knowledgeable, upstanding politicians? People look at the official literacy rate in India being around 75% but forget that to be considered literate you simply need to be able to read and write your name it doesn't mean you can read newspapers or write papers.
Furthermore, China's rise itself proves that democracy is not necessary for economic growth or prosperity.
This is just ridiculous.
If you look at PISA 2009 rankings the top spots are essentially held by countries that speak little to no English (with Shanghai, China taking top spots in every category):
Furthermore, the PISA results actually disprove the old myth that all Asian countries do is memorize and regurgitate knowledge but cant actually apply what they learned to real life situations. However, as you would expect you have those in the west who refuse to accept the reality that things are changing and they will no longer be number one.
And you seriously think this is a bad thing?
The years when governments, particularly those of the third and developing world, had stricter state controlled economies (i.e between 1950 to 1973) the world economy grew by 3% a year. However, the moment countries followed the advice the west gave them and neoliberalism was introduced (usually as a precondition for trade agreements and aid during a financial crisis) from the 1980s onward the world economy has only grown by 1.5% a year. In fact following liberalization of finance and trade we have seen capital inflows surge, you have cases of massive speculation, credit booms and asset bubbles as well as current account deficits which resulted in the financial crises.
Do not necessarily believe the advice the IMF and World Bank give since these are tools of the west used to keep them rich and everyone else poor.
What you are talking about is an outsource of the service sector which means nothing in comparison to China getting the outsource of manufacturing.
Service sector related jobs aren't secure since automated systems can be easily setup to replace them. Furthermore, they do not add to a countries technical capacity like manufacturing jobs (which go to China) would. For example, how much are you as a nation going to learn about building supercomputers by answering calls for Pizza Pizza or offering customer support for a company that retails body oils, office supplies, etc...?
Over the years from the outsourcing of manufacturing jobs also comes an outsourcing of capital equipment and technological know how. China has harnessed what it has learned and is now building upon that knowledge via the manufacture of various value added products particularly within the technological industry.
-----
That is my take on this subject. If anyone has anything to add or corrections they want to make I would be interested to read their point of view.
