Some interesting points in this article.
[quote]This year, for the first time, India passed China in economic growth. Its gross domestic product (GDP) shot up by more than 8 percent and now amounts to more than $3,000 per capita, on a purchasing-power-parity basis. China
Dick should have fact checked his article. The Congress Party is in power at the moment, no?
China will be in big trouble if some kind of economic, political, or natural disaster happens and the government collapses.
For India, on the other hand, it will be business as usual. :help:
robotz? get real…why not also mention the robots will be in an underwater manufacturing lab in the ocean so they take no land and are solarpowered LOL.
oh and they can fly. 
Robotz are da bizniz, but your post izn’t.
What does relatively unique mean???
Oh, go on and quibble about semantics.
Now does anyone have anything substantial to say related to the artiicle?
The main point - that China, in its race to the bottom, relies far too much on muscle rather than brain power - makes intuitive sense.
[quote=“Quentin”]
The main point - that China, in its race to the bottom, relies far too much on muscle rather than brain power - makes intuitive sense.[/quote]
How could they rely on anything else? Low skilled workers are what they have in abundance, so why wouldn’t they follow a path that puts them to work?
A lot of people criticize China for the path it has followed toward economic development. Some of those criticisms are valid, but generally, Beijing has been heading in the right direction. Why should they go hi-tech if they can make it just as well with cheap labor? And herein lies the fallacy of that article. The economically ignorant (does that mean they’re sparing with their ignorance?) have been telling us for years that all of us are going to be put out of work by technology. What complete bullshit. It didn’t happen 200 years ago and it isn’t going to happen in the next 200. That’s not how economies and trade work.
Every month, plenty of 1st world manufactures face the choice of either automating or moving to places like China. The majority of them choose to move. Some of them even go from a high level of automation to labor intensive manufacturing because they figure out that the cheapness of the latter often makes up for the higher wastage.
The author of that article seems to think that the Indians are somehow doing better than the Chinese because they draw a greater portion of their income from services. This is mostly irrelevant. What he doesn’t say is that most of the income from India’s IT industry or call centers goes to a very small slice of the work force. Much has been said about China’s uneven development. Nevertheless, at least workers from the interior have been able to participate in the boom and bring savings home from the factory towns of the East. There is no corresponding trend in India. The reason? All of these service industries India has been getting into require no cheap, unskilled labor or vertical supply chains. The work is beamed from overseas by broadband or telephone line into one office. Once the work is done, it is sent back out. The value added is all concentrated in one place and there is no need to develop much infrastructure to support growth. And a good thing, too, because unlike China, India is in very sad shape for any and all kinds of infrastructure.
I’m not saying that India is somehow doing something “wrong.” They are definitely doing some things right. However, to say that China is “racing to the bottom” just because it has developed an economy that is currently dependent on manufacturing is plain stupid. I’ve travelled a good bit in both countries and the difference is shockingly clear to me. China is poor and fucked up, but it is nowhere near as poor as India. Has the author seen the grinding poverty that Indians live in? I’ve seen baby and mother lying starved to death and covered with flies on the street in Delhi. People just walked by the bodies for hours, completely indifferent. When was the last time anybody saw something like that in Beijing?
Having an economy that’s dependent on the services sector probably will not work in India’s favor.
The difference between service sector and manufacturing sector is that in the manufacturing sector, you can realize substantial productivity gains by investment of more capital (the kind that you get from running a factory). In other words, reinvestment will usually result in increased productivity = increased profitability.
You can’t just throw money at a service problem the same way. About the only kind of productive use of additional capital that you can make for a service economy is to pay for education. However, education is more of a speculative investment than plant machinery; the owner of a factory can buy an automation machine and know that he will own it, but he cannot buy a child, educate the child, and own the child in the future. (Well, not in a remotely civilized country anyway). As a result, education investment either depends on government funds (public education) or family funds (the rich can afford education to get well-paying jobs, while the poor…) In any event, it’s a lot harder to take a successful service business and make it more profitable. You can expand to get more business, but not without expanding your costs.
As for the “in the future all work will be done by robots” argument – well, people have been saying that since the 1800s (in the future, automation will liberate us from the need to work more than four hours a day…!) It was a cornerstone of the beliefs of a lot of the utopian socialist movements with their planned communities. What we’ve seen instead is that increasing productivity leads to increased wages for those workers who keep their jobs, and leads to a larger cut of the labor savings being used to increase the plant owner’s profits.
Put another way: if all the work were done by machines, why would the machines’ owners give any of the output to the rest of us? What can we do for them?
Where India does have an advantage over China is in Research and Development. China needs to get more on the ball with this if it wants to keep riding its wave; R&D departments are moving to India. However, where this gives India an advantage is in discovering and using the techniques and products of the future, which will drive more efficient manufacturing and manufacturing of newer goods (most likely of pharmaceutical products). But that has nothing to do with the service sector, and everything to do with R&D and resulting improvements to the manufacturing sector.
[quote=“yisha’ou”]
Where India does have an advantage over China is in Research and Development. China needs to get more on the ball with this if it wants to keep riding its wave; R&D departments are moving to India. However, where this gives India an advantage is in discovering and using the techniques and products of the future, which will drive more efficient manufacturing and manufacturing of newer goods (most likely of pharmaceutical products). But that has nothing to do with the service sector, and everything to do with R&D and resulting improvements to the manufacturing sector.[/quote]
And I suspect that the reason India has been successful in R&D isn’t just a result of it turning out well trained engineers who can do their work in English. China is producing a good number of competent engineers, too. Quite a lot of them can do their work in English. The difference I see is that any time a foreign or local company shares intellectual property with a Chinese company, there is a high risk that that property is going to be knocked off. I’ve not heard this complaint as often from people I know who are doing work in or through India. Is the legal system there providing better protection for intellectual property rights? Do company’s there realize that it is in their interests to respect such rights? They definitely couldn’t be worse than China in this area.
Despite all the hoopla, the US imports five times more (value) from Japan and China if you subtract all the components imported into China for assembly and re-export. Also, China is essentially Brazil in terms of trade weighted importance. There’s a lot of hype about China and this has happened many times in the past. Learn from history. It is growing very quickly as did many other nations in East Asia and this is well outlined in the catch-up theory. China may or may not be important in 30 years or 50 years but one undeniable fact is that ditching communist policies in China and socialist ones in India have been responsible for the heady rates of growth. Too bad our friends in the West cannot see this. Ultimately, it will be precisely such policies that enable Africa to grow.