China signs biggest free trade deal with S Korea

[Zeng Ge]

finally，find true love.......

what he doesn't know is......

 

[Beidou2020]

Hmmmm.. ...interesting, well as i said before, S. Korea doesn't really see China as a threat at all contrary to other East and south East Asian countries like Japan, Vietnam, Philippines and Taiwan . So there is little to no hostility towards any deals with China in any field. Whereas surprisingly, the same can't be said of the way it regards Japan. This is a major issue /problem /headache to not only both countries but also the U. S, since Seoul is the most anti Japanese country in not only Asia but the world (yes even more than China) . So it's indeed a dilemma .

Anyway, S. Korea is bound to be close to China economically anyway, due to their close proximity with each other. So no surprise about this deal. Their trade will only increase more with time.

The surprise though is that at almost 300billion dollars of trade a year, China -s. Korean trade is almost 4times China's trade with India a country of a over a billion two hundred million people with whom it shares a border as well make strange.

Indians are highly bureaucratic and anti-business in general. Yes you have the odd Indian here and there that does business like East Asians but in general Indians are very nationalistic and backward when it comes to business.
They don't know how to govern or do business.

 

[AndrewJin]

Indians are highly bureaucratic and anti-business in general. Yes you have the odd Indian here and there that does business like East Asians but in general Indians are very nationalistic and backward when it comes to business.
They don't know how to govern or do business.

I don't know why they don't open their market. In Wuhan, we have Japanese shopping malls, Swedish malls, HK malls, local malls, malls from other provinces, they are a in healthy competition, why afraid?

 

[Shotgunner51]

Indians are highly bureaucratic and anti-business in general. Yes you have the odd Indian here and there that does business like East Asians but in general Indians are very nationalistic and backward when it comes to business.
They don't know how to govern or do business.

I would say it's a bit subjective to analyze the situation along that direction, that they have such a motive (or don't have one), let's check the potential of co-operation between China and India based on ongoing ground realities.

First of all, India is a basically an agrarian country (check agricultural % share of GDP), exporting resources and cheap services in exchange for capital/consumer products, and energy.

As a market for industrialized countries, first let's look at consumer goods. Exceptionally low income (check India's GDP/capita vs Sub-Saharan Africa) and the presence of huge unfavorable segments (say poverty, malnutrition, hygiene practice, childhood stunting) make India at best a market for low-end goods (low value-added goods). However due to a large base of population, volumes of low-end goods could be significant even those unfavorable segments are excluded from consideration.

Then for capital/industrial goods, the market is even smaller due to the low base of infrastructure and industrialization. The market of capital/industrial goods market is directly related to investment, which is very limited in India due to small domestic reserves after years of vicious cycle in trade deficit and currency deflation (check INR exchange rate, for the last 10 years 30% devaluation, 5.7% over last 12 months). In the long run, it largely depends on foreign investment. However one major area would be capital goods by government investment in defense, however several foreign countries will continue to benefit from this sector, but not domestic economy.

India does export resources, however compared to resources-rich Sub-Saharan Africa, Latin America and MENA, it's insignificant. In fact India also rely heavily on import of say energy like industrialized countries, making India unique in its trading structure.

Other than agriculture, the uniqueness of India is having a large population, even if the unfavorable segments are discounted there is still an abundant supply of services-related (which doesn't require much on infrastructure) workforce at cheap price, and can also take a fair share of international market say cross-border BPO, competing with countries with similar advantages like the Philippines and Bangladesh.

Summarizing the above, from a China perspective, neither agricultural-trade (China itself has 3 times the GDP of India in agriculture) or BPO are major segment, Sino-India trade will basically maintain the current structure (exporting low-end merchandise, importing resources/commodities) with slight growth at best. Very limited opportunities on capital/industrial goods investment (or sales), infrastructure investment, except occasional financial arrangement (e.g. short-term loans, export credit) are made to reduce trade imbalance. China will continue FTA with other major countries (e.g. SK, Australia) or regions (e.g. ASEAN, CEE), while Sino-India economic interaction will main at current level if not further reduce.

 

[HRM YANG]

Yes, yesterday evening watched a little bit of a round table discussion on TVBS.

Experts agree Korea took an advantageous position vis a vis Taiwan and Japan. What they are concerned is not only to have to compete Korean products in Chinese market; but also, compete the Chinese tech and machinery that is likely to be upgraded thanks to much closer relations with Korea and start to challenge the Taiwanese and Japanese industries.

Experts are urging the government to pass the services agreement but seem to be not so optimistic about that.

Ah Taiwan manufacture industry particularly on electronic devices' quotas... seems not optimistic like HTC... and acer no progress...
One seems completely contrary, that luxgen motor, quite prevail in mainland, some comments said it has been given a lot preferential policies because the holder is a pro Beijing( at least not sponsor of spitting.)
Em... I would use Taiwan and ROK products rather some other Asian countries...

 

[mike2000 is back]

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finally，find true love.......
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what he doesn't know is......
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Hahhaahhaha the last image is epic.

 

[HRM YANG]

I would say it's a bit subjective to analyze the situation along that direction, that they have such a motive (or don't have one), let's check the facts.

India is a basically an agrarian country (check agricultural % share of GDP), exporting resources and cheap services in exchange for capital/consumer products.

As a market for industrialized countries, first let's look at consumer goods. Exceptionally low income (check India's GDP/capita vs Sub-Saharan Africa) and the presence of huge unfavorable segments (say poverty, malnutrition, hygiene practice, childhood stunting) make India at best a market for low-end goods (low value-added goods). However due to a large base of population, volumes of low-end goods could be significant even those unfavorable segments are excluded from consideration. In the long run, it largely depends on foreign investment.

Then for capital/industrial goods, the market is even smaller due to the low base of infrastructure and industrialization. The market of capital/industrial goods market is directly related to investment, which is very limited in India due to small domestic reserves after years of vicious cycle in trade deficit and currency deflation (check INR exchange rate for the last 10 years). However one major area would be capital goods by government investment in defense, several foreign countries will continue to benefit from this sector.

India does export resources, however compared to resources-rich Sub-Saharan Africa, Latin America and MENA, it's insignificant. In fact India also rely heavily on import of say energy like industrialized countries, making India unique in its trading structure.

Other than agriculture, the uniqueness of India is having a large population, even if the unfavorable segments are discounted there is still an abundant supply of services-related (which doesn't require much on infrastructure) workforce at cheap price, and can also take a fair share of international market say cross-border BPO, competing with countries with similar advantges like the Philippines and Banglasdesh.

Summarizing the above, from a China perspective, neither agricultural-trade or BPO are major segment, Sino-India trade will basically maintain the current structure (exporting low-end goods, importing resources) with slight growth at best. Very limited opportunities on capital/industrial goods investment (or sales), infrastructure investment, except occasional financial arrangement are made to reduce trade imbalance. China will continue FTA with other major countries (e.g. SK, Australia) or regions (e.g. ASEAN, CEE), while Sino-India economic interaction will main at current level if not further reduce.

India is potential market of utility infrastructures at least its demand won't be small.
But I don't think their consumption capacity is sufficient and their government ( central & regional) would have financial expenditure on construction.
India as a matter of fact is in a scarcity of reasons of being prosperous like China. As a huge territory country they can't count on achieving the stride like China by intending those commercial trade or mercantilism-related trade, they need industry but as you said look what exactly they are, let alone in foreseeable future how violent the compete of manufactured goods, India has no competitive power at all

 

[mike2000 is back]

Indians are highly bureaucratic and anti-business in general. Yes you have the odd Indian here and there that does business like East Asians but in general Indians are very nationalistic and backward when it comes to business.
They don't know how to govern or do business.

Maybe true, but not Indians per se (since they are in general quite smart /business driven) it's their government. But as they also say 'the people get the government they deserve '. So kind of intriguing.

 

[Shotgunner51]

India is potential market of utility infrastructures at least its demand won't be small.
But I don't think their consumption capacity is sufficient and their government ( central & regional) would
have financial expenditure on construction.
India as a matter of fact is in a scarcity of being prosperous like China. As a huge territory country they can't count on achieving the stride like China by intending those commercial trade or mercantilism-related trade, they need industry but as you said look what exactly they are, let alone in foreseeable future how violent the compete of manufactured goods, India has no competitive power at all

There is a severe lack of infrastructure, it's a undeniable fact, same in many countries, potential or bright future are just nice ways of describing cold-hard reality. Without fiscal reserves, there is no investment, hence no infrastructure. Inadequacy in domestic fiscal reserves means foreign investment will be critical, however due to many factors (e.g. currency, limited supply of fund, geopolitical constraint) I don't see a surge in this area.

While China wouldn't invest in India for several reasons, it's upto other financial powerhouses like Japan, SK to evaluate the potential you mentioned. Irregard of background of investors, I believe pragmatism will be practiced.

 

[TaiShang]

A government is simply an extension of the people. In most cases, if people are smart and efficient/result oriented, this reflects on government, sooner or later (save negative foreign interference and severe international conditions).

Now, coming to India, it seems, Indian government is a perfect reflection of its overall culture and dynamics. hence, not much faith in that regard as to their becoming a significant trade partner of China.

China and South Korea will achieve quite a constructive synergy, which will reflect on their annual trade within this decade, probably making Korea China's largest Asian trade partner.

Maybe true, but not Indians per se (since they are in general quite smart /business driven) it's their government. But as they also say 'the people get the government they deserve '. So kind of intriguing.

 

[xunzi]

Maybe true, but not Indians per se (since they are in general quite smart /business driven) it's their government. But as they also say 'the people get the government they deserve '. So kind of intriguing.

You probably never work with an Indian before. LOL

 

[AndrewJin]

Maybe true, but not Indians per se (since they are in general quite smart /business driven) it's their government. But as they also say 'the people get the government they deserve '. So kind of intriguing.

Well, people there tend to blame everything on their government. But isn't it that they claim to live in the biggest democracy in which central government is elected? If Modi fails one day in the future, then should he be the only target?

 

[TaiShang]

Well, people there tend to blame everything on their government. But isn't it that they claim to live in the biggest democracy in which central government is elected? If Modi fails one day in the future, then should he be the only target?

Indians love democracy (on the surface) because this allows them to put the blame on anybody but themselves. When this becomes the national psyche, then they end up being, well, India.

 

[AndrewJin]

Indians love democracy (on the surface) because this allows them to put the blame on anybody but themselves. When this becomes the national psyche, then they end up being, well, India.

The core of democracy I think is the demo(people).

 

[Shotgunner51]

Indians love democracy (on the surface) because this allows them to put the blame on anybody but themselves. When this becomes the national psyche, then they end up being, well, India.

Democracy = Prosperity? There are over 190 countries in the world, more than 90% are considered as democratic. Note the wide application of such a system, while also citing severe contrast in economic development between various countries, apparently there is no pattern relating democracy to prosperity of nations. Looking at the other group, a smaller sample size, those classified as undemocratic, severe contrast in economic development is also observed.

Prosperity and democracy can co-exist, however neither one is the consequence of the other.