BRICs Will Be ICs If Brazil and Russia Don't Shape Up

[SrNair]

If it is a private dialogue the yes I will absolutely ignore, as I said I don't care. However it is a forum, we come here with an intention to discuss and exchange views, and are you aware of the fact that these dialogues can be read by all viewers? That's why I have to clarify his misjudgement, which is used a basis for other discussions. If the foundation is just wrong then how can we further construct useful discussion base on it?

Their power segment is actually improving a lot with addition of new nuclear reactors (check relevant threads on this forum). As per your other needs, as I pointed out you can find numerous threads on this forum too, all you need is read.
Pakistan Defence & Industry or
Economy & Development

Then we also share same thing.

I had seen a lot of thread in here about the power shortage in Pakistan.One from the Rawalpindi also.
Have you heard about the shortage of petrol in there for the last week?

 

[ito]

Yeah after 2016? Do you believe it yourself?

Anyway, I guess you missed the latest news:

China 2014 retail sales up 12% & China's industrial output grows 8.3% in 2014

Consumption now makes up the majority of Chinese economic growth, and the Services sector is much larger than the manufacturing or agricultural sector.

By they way why do Chinese brag so much??

I want to inject a sense of realism into ever bragging Chinese.

BBC News - China's growth slows to weakest in 24 years

 

[papertiger]

that's why i think the BRICS bank is important to the global financial structure which was built single-handed by US with in 1944. though 'BRICS' the grouping doesn't make much sense, it does represent some rebellion effort to challenge the post war US-led West global financial institutions, which the action itself has very profound meaning.
actually, if WB and IMF had functioned just fine, China and many other Asian countries wouldn't have needed to accumulate such huge pool of foreign reserves. WB & IMF are already notorious for their extremely slow reaction to crisis .....

and we all know what US means when they say 'international', don't we?

I don't think China wants to change the world order. This is why it tries to downplay its economic success.

China is becoming rich and powerful under the current world order and it does not what aany turbulence until they are fully developed.

I suspect China is simply creating the bank to act diplomatically towards its allies. However its contribution in practical terms (being so small) exposes its spurious intentions.

China is not really a rival to the US, it is its heir apparent. Everything from China's economic ideas to its technology is all US inspired. Even its economy is reliant on the US market (and the EU too), vice versa.

I suspect we will see China and the US move closer and closer together as time goes on.

 

[Chinese-Dragon]

By they way why do Chinese brag so much??

I want to inject a sense of realism into ever bragging Chinese.

BBC News - China's growth slows to weakest in 24 years

Yeah we have been trying to re-balance our economy for several years now, and we have achieved it. Consumption is now the main driver of Chinese economic growth, and the Services sector is now the largest sector.

The result? 7.4% growth rate of a $10.4 trillion economy. Lower growth, but more sustainable. Exactly what we were aiming for, we only missed our 7.5% growth target by 0.1%.

Now tell me how many times more is that, than a 4-5% growth rate of a $2 trillion economy with a similar population.

As for bragging, we never claimed we were a superpower, like your President Kalam claimed about India. Despite India being at the bottom of the world in terms of poverty, below even Africa.

Now that is real bragging. Like Ancient India inventing airplanes and interstellar space ships.

 

[ito]

Yeah we have been trying to re-balance our economy for several years now, and we have achieved it. Consumption is now the main driver of Chinese economic growth, and the Services sector is now the largest sector.

The result? 7.4% growth rate of a $10.4 trillion economy. Lower growth, but more sustainable. Exactly what we were aiming for, we only missed our 7.5% growth target by 0.1%.

Now tell me how many times more is that, than a 4-5% growth rate of a $2 trillion economy with a similar population.

As for bragging, we never claimed we were a superpower, like your President Kalam claimed about India. Despite India being at the bottom of the world in terms of poverty, below even Africa.

Now that is real bragging. Like Ancient India inventing airplanes and interstellar space ships.

It is better keep quite than post some gibberish. The slow down is nothing to do with re-balancing your economy. International demand for Chinese products have come down...FDI and investments have come drastically. Then there are questions regarding unsustainablilty of Chinese economic policies. Sorry to burst you bubble, but China may never see the kind of growth it has seen in the past two decade. And may be next year Chinese growth may be below 7%

 

[Chinese-Dragon]

It is better keep quite than post some gibberish. The slow down is nothing to do with re-balancing your economy. International demand for Chinese products have come down...FDI and investments have come drastically. Then there are questions regarding unsustainablilty of Chinese economic policies. Sorry to burst you bubble, but China may never see the kind of growth it has seen in the past two decade. And may be next year Chinese growth may be below 7%

Clearly you have no idea what you are talking about.

And 7% growth or below is fine, since our base economy is now so large that we will still be adding over $1 trillion every year.

That's an entire India, every two years.

 

[Echo_419]

Bro, I think Chinese Dragon was simply injecting a much needed dose of realism to the discussion.


IMO, China was blessed with good timing. When China became the world's factory, no other developing country could offer the same economy of scale, infrastructure, low wages, government tax breaks, and minimal government red tape/bureaucracy that China could. Add to that a shared cultural background and affinity with the now first world Asian tigers (and Japan) and you have an extremely appealing investment destination at a time when those aforementioned nations were looking for a manufacturing base for their products.

Furthermore, we had Deng Xiaoping - a true visionary who had the stones to do what it took to make sure nothing derailed China's economic expansion. IMO, Deng Xiaoping was the greatest Chinese leader of the 20th century, bar none, and he had the revolutionary credentials to make the necessary painful economic changes that couldn't be opposed by any of his political opponents. (But that's for another discussion )

I'm not doubting that India can be a manufacturing hub but there will never be a "China part 2" in the sense that once low end manufacturing starts moving away from China, there will never again be one single nation to capture all of it. India has its work cut out for it since it has to deal with competitors in the form of SE Asian nations as well as advances in technology that allow manufactures to save money while staying in their home countries (i.e. 3d printing). It will be interesting to see how India manages its challenges ahead and if it can capitalize on its demographic dividend - or indeed, if it's a dividend at all.

Well I agree with the point that pulling of a 'China' is very very hard,I will not underestimate our resolve & don't forget there is no nation as big as ours to capture all that Low-Medium Manufactring
Anyways thx for wishes

Yes, mass manufacturing is an essential part of the development process, UK/America/Japan etc all went through it.

Because mass manufacturing is the only thing that can provide hundreds of millions of low skilled and low paid jobs in a developing country, and it is one of the best methods of urbanization (encouraging rural workers to move to the cities).

Urbanization is necessary for development, since infrastructure becomes more efficient when the population becomes urbanized. Infrastructure in rural areas is inefficient because people are too spread out, you need to build 10x more roads and 10x more water pipelines, electricity lines, hospitals, etc.

Mass manufacturing also requires (and promotes the creation of) an efficient and competitive national infrastructure base, which is another way countries become developed.

So India needs to attract more low-level manufacturing, which is leaving China and moving to SE Asia as we speak.

Thx to decade of policy paralysis by the previous govt but not to worry as we speak massive & micro reforms are being implemented everyday to give a tough competition to SE Asia & we have something they don't like Unlimited supply of labor & a couple of other things
But I don't want to sound to cocky so let's wait & watch

 

[ito]

Clearly you have no idea what you are talking about.

And 7% growth or below is fine, since our base economy is now so large that we will still be adding over $1 trillion every year.

That's an entire India, every two years.

Regarding adding $1 trillion, that depends on how much growth rate, inflation, and exchange rate you guys are going to have in future.

As you are bringing India again and again, I will say that China doesn't enjoy much advantage over India, except that you have a larger base to start with. Neither are knowledge economies and, given that each has billion+ people, both use abundant cheap labor to propel their economies. If India can grow at higher rate than China, India can catch up.

 

[Yizhi]

I don't think China wants to change the world order. This is why it tries to downplay its economic success.

China is becoming rich and powerful under the current world order and it does not what aany turbulence until they are fully developed.

the current world order is the same for every country, and China actually suffered a lot for being 'Communist'. the relevant question should be why even the 'Communist China' can utilized this order and benefit from it while many other countries failed to do so.

I suspect China is simply creating the bank to act diplomatically towards its allies. However its contribution in practical terms (being so small) exposes its spurious intentions.

actually it's India, Brazil and Russia who needed this bank more, because you guys were the ones suffer severely from unstable currency and you don't trust WB & IMF to come and save you either. China happened to have the cash, so we leveraged the situation and the intention was very clear, nothing 'spurious' about it.

China is not really a rival to the US, it is its heir apparent. Everything from China's economic ideas to its technology is all US inspired. Even its economy is reliant on the US market (and the EU too), vice versa.

I suspect we will see China and the US move closer and closer together as time goes on.

US has the best technology and know-how, when you learn, you'll want to learn from the best. even back in the Great Leap Forward days in 50s, the Chinese slogan was 'surpassing Britain and catch up with US', no one thought of 'surpassing India and catch up with USSR'. this is where Indian obsession of matching China baffles me. Indians should use US as the benchmark.
and for those still believe Chinese economy is reliant on exporting to the West:
Exports of goods and services (% of GDP)

 

[FairAndUnbiased]

Oh yeah I totally agree with @ Chinese Dragon , just wanna steer him away from the fortune telling contest and discuss others.

You were right. There was one very important and and unique external environment that China had when Deng Xiao Ping decided to open up, and that's the economic ladder in East Asia during 1980's.

At that time, East Asia was already industrialized and export-oriented. HK and Taiwan had long established their overseas markets on OEM/ODM or labor-intensive manufacturing like toy, lighting, clothing, umbrella, bicycles etc. However they faced shortage of land, and labor. Immediately after Deng launched his policy, HK, Taiwan, and to some degree Japan, massively relocated their manufacturing bases to Guangdong (e.g. Li & Fung), and that sparked off the first wave in China's new age of industrialization. A second wave came soon when Taiwan tech industries massively relocate their electronics assembly lines to Jiangsu (e.g. Foxconn). Till now, Guangdong and Jiangsu are still the top 2 industrialized provinces in China.

* At that time, 70% of China FDI came from HK (included capital from TW who had to route through HK for political reasons)
* At its peak, HK and Taiwan factories employed over 30,000,000 workers in the single province of Guangdong.
* Inspired by Deng's guidance, China officials have demonstrated remarkable learning abilities and ultra-high efficiency, provided all necessary helps to HK/TW/JP factories in labor recruit, roads, rails, sea ports, airports, power/utility supply, land, taxation, import/export customs and even visa and expat housing and educations for expat kids.

Long story short, I think that pretty much summarized that unique situation at the time, and the unique value of HK/TW/JP to the initial stage of industrialization in PRC.

Jiangsu isn't the main base of electronics assembly, its only the 2nd base I think. Foxconn's biggest plant is still Shenzhen.

I think its better now, where native Chinese skills are emphasized. Just like US promotes American owned companies in America, China should promote Chinese owned companies in China. There are enough overseas returnees or domestically educated high skill people to support innovative industries.

You still can't industrialize an economy based on labor intensive FDI. They can provide the employment and some open technologies, but the core technology will never be provided. Vietnam tried. Now is the 30th year of Vietnamese reform. In the 30th year of Chinese reform, what are the achievements and GDP per capita, what is Vietnam's? Does Vietnam have the equivalent of Huawei, ZTE, Lenovo, high speed rail or even an English teaching service like New Oriental? South Korea tried to go beyond low end developed country (Portugal and Greece level) and its economy is stagnating because they still don't have the core technology from US/Japan, nor did they try to get revolutionary new technology to replace it, while Chinese technology has basically caught up in most aspects, so they are squeezed both from the top and the bottom.

 

[Shotgunner51]

Jiangsu isn't the main base of electronics assembly, its only the 2nd base I think. Foxconn's biggest plant is still Shenzhen.

I think its better now, where native Chinese skills are emphasized. Just like US promotes American owned companies in America, China should promote Chinese owned companies in China. There are enough overseas returnees or domestically educated high skill people to support innovative industries.

You still can't industrialize an economy based on labor intensive FDI. They can provide the employment and some open technologies, but the core technology will never be provided. Vietnam tried. Now is the 30th year of Vietnamese reform. In the 30th year of Chinese reform, what are the achievements and GDP per capita, what is Vietnam's? Does Vietnam have the equivalent of Huawei, ZTE, Lenovo, high speed rail or even an English teaching service like New Oriental? South Korea tried to go beyond low end developed country (Portugal and Greece level) and its economy is stagnating because they still don't have the core technology from US/Japan, nor did they try to get revolutionary new technology to replace it, while Chinese technology has basically caught up in most aspects, so they are squeezed both from the top and the bottom.

I didn't compare Guangdong to Shenzhen in details, my general observation is that Guangdong' industrial GDP rank no. 1, Jiangdu no. 2. On PC/Tablet production, Jiangsu (Suzhou/苏州 in particular) is world largest hub, but I didn't compare other electronics sector. In other electrical appliances, mostly in Guangdong (东莞/佛山). Foxconn maintains huge base in Shenzhen, and now expanded inland, their new Zhengzhou (郑州) plant supply all iPhone 6 worldwide. Low-end manufacturing processes are fast moving out of Shenzhen/Guangdong because of high labor/land costs, Foxconn's Zhengzhou expansion is just an example.

You are right, labor intensive FDI can sparks off initial wave of industrialization, but cannot guarantee sustainable growth. Horizontal growth (scale) is easier to achieve, vertical growth is totally different story. If China can overcome certain obstacles (I mentioned in another thread), I think catching up or surpassing (in certain sectors) neigboring E Asian advanced economies is very possible.

 

[FairAndUnbiased]

I didn't compare Guangdong to Shenzhen in details, my general observation is that Guangdong' industrial GDP rank no. 1, Jiangdu no. 2. On PC/Tablet production, Jiangsu (Suzhou/苏州 in particular) is world largest hub, but I didn't compare other electronics sector. In other electrical appliances, mostly in Guangdong (东莞/佛山). Foxconn maintains huge base in Shenzhen, and now expanded inland, their new Zhengzhou (郑州) plant supply all iPhone 6 worldwide. Low-end manufacturing processes are fast moving out of Shenzhen/Guangdong because of high labor/land costs, Foxconn's Zhengzhou expansion is just an example.

You are right, labor intensive FDI can sparks off initial wave of industrialization, but cannot guarantee sustainable growth. Horizontal growth (scale) is easier to achieve, vertical growth is totally different story. If China can overcome certain obstacles (I mentioned in another thread), I think catching up or surpassing (in certain sectors) neigboring E Asian advanced economies is very possible.

Check the newest research by South Korea, China has already caught up in every sector except automotive. I don't think there's any magical obstacles that China faces; ever since Mao's days, Chinese have been strongly promoting domestic scientific and technological development. There's already a culture of science here, something that alot of other developing countries don't have.

 

[Shotgunner51]

Check the newest research by South Korea, China has already caught up in every sector except automotive. I don't think there's any magical obstacles that China faces; ever since Mao's days, Chinese have been strongly promoting domestic scientific and technological development. There's already a culture of science here, something that alot of other developing countries don't have.

I did came across a research report by a SK government dept about what areas they lead/lag vs China, impressed by their sense of urgency seeing anticipating potential challenges. Long story short the fact is that there are indeed several areas that China lag behind e.g. shipbuilding especially in LNG sector, semiconductor, digital display etc., in which Korea not just lead China but also Japan.

The obstacles that I mention are all related to our polico-socio-economic structure ("政治社会经济体制"), not anything at tech level, say education reform, political reform, legal reforms etc. In this area Mao failed, Zhou En Lai cut losses, Deng turn around, and now Xi is so far on the right track. We do have a culture of science here, it's in East Asian culture, what we need to to do next is to further release productivity and creativity by continue to deepn reforms.

 

[FairAndUnbiased]

I did came across a research report by a SK government dept about what areas they lead/lag vs China, impressed by their sense of urgency seeing anticipating potential challenges. Long story short the fact is that there are indeed several areas that China lag behind e.g. shipbuilding especially in LNG sector, semiconductor, digital display etc., in which Korea not just lead China but also Japan.

The obstacles that I mention are all related to our polico-socio-economic structure ("政治社会经济体制"), not anything at tech level, say education reform, political reform, legal reforms etc. In this area Mao failed, Zhou En Lai cut losses, Deng turn around, and now Xi is so far on the right track. We do have a culture of science here, it's in East Asian culture, what we need to to do next is to further release productivity and creativity by continue to deepn reforms.

Korea doesn't lead Japan in semiconductors at all. Maybe in sales volume, but not in tech level. Japan makes the machines that make the semiconductors, Korea buys those machines from Japan and uses them. The biggest Korean semiconductor product is memory, but memory is the one of the cheapest and lowest tech (in terms of design difficulty) semiconductor products. If you have read the report carefully (here) you'd note that they have already fallen behind in several key factors. They have also admitted that Korean displays now have less market share than Chinese displays.

Chinese Chasers: Korean Manufacturers Will Face More Difficulties in Export Due to Chinese Chasers | BusinessKorea

I don't think it has anything to do with political social or economic structure. In 1949 China produced 100 tons of steel per year. The fact that when Mao came to power, China couldn't produce a car and when Mao died China had produced rockets, satellites and submarines, is itself amazing. Those policies that led to China going from horse riding to satellite, are of course not the same policies that led China from satellite to internet.

 

[JonSnow]

China is gold. The rest are bricks.