If Donald Trump becomes US President, India may gain at China's expense. Here's why..

[dray]

That's what everyone says, including India. Yet their trade deficit to China keeps rising every year.

There is a simple reason for this. China has planned and built an entire national manufacturing base, in order to maximise the competitiveness of our industries.

And in the market economy, the most competitive gets the most orders. You don't get rewards for being a slacker.

Tariffs seem like an easy solution, except everyone knows what happens when you raise tariffs. The other side raises tariffs in return, it's Trade War 101. All sides lose, nobody gains.

You don't think India is handing us this massive trade deficit every year for fun do you? If they could have done something, they would have done it already. People have been talking about the trade deficit for decades now, the second they genuinely think it's a bad deal they will cut the trade off.

China has become world's largest outsourcing destination for manufacturing because of low cost of production, that was achieved through faster clearance in SEZs without any consideration for the environment, and its very large cheap labour force, that was often exploited by flouting every labour laws in the world. When China started this outsourcing business, it didn't have all the infrastructure that it has today, so don't tell me that China gets FDI for only it's infrastructure. Now that the labour cost and other expenses are increasing in China, it is becoming less and less attractive as an investment destination, many companies have started shifting their manufacturing from China, and it will only increase going forward in 5-10 years to a point where the outsourcing model won't remain sustainable.

Coming to USA, they are certainly considering to bring back some jobs to homeland, and reduce imports and outsourcing, so are European countries. India didn't have the kind of trade deficit 10-12 years ago, we were in fact became a net trade surplus country in 2004; the last year of previous BJP government. The current trade deficit will be eliminated in next 5-10 years, god times for China will not going to stay for long.

Tariffs seem like an easy solution, except everyone knows what happens when you raise tariffs. The other side raises tariffs in return, it's Trade War 101. All sides lose, nobody gains.

And needless to say, the beneficiary country of the trade deficit suffers most.

 

[Chinese-Dragon]

The current trade deficit will be eliminated in next 5-10 years, god times for China will not going to stay for long.

Such amazing future predictions.

The same predictions we have been hearing for who knows how long.

If you don't want a trade deficit, then make something that other people want to buy. If you are competitive you will get orders.

 

[dray]

Such amazing future predictions.

Not predictions, but information...because India is working towards reducing the trade deficit in the short term and becoming a net trade surplus country in the longer term under the new government. BJP did it in 2004 before moving out of the government, BJP can and will do it again.

The same predictions we have been hearing for who knows how long.

And now there are people who wants to work on it also, and deliver results.

If you don't want a trade deficit, then make something that other people want to buy. If you are competitive you will get orders.

Rather, we are working on three points.

1. Make everything that we can make for us.

2. Make something for others.

3. Not buy from others things that we can make.

 

[Chinese-Dragon]

Rather, we are working on three points.

1. Make everything that we can make for us.

2. Make something for others.

3. Not buy from others things that we can make.

Well, that is the correct path at least.

 

[Bombermanx1]

That's what everyone says, including India. Yet their trade deficit to China keeps rising every year.

There is a simple reason for this. China has planned and built an entire national manufacturing base, in order to maximise the competitiveness of our industries.

And in the market economy, the most competitive gets the most orders. You don't get rewards for being a slacker.

Tariffs seem like an easy solution, except everyone knows what happens when you raise tariffs. The other side raises tariffs in return, it's Trade War 101. All sides lose, nobody gains.

You don't think India is handing us this massive trade deficit every year for fun do you? If they could have done something, they would have done it already. People have been talking about the trade deficit for decades now, the second they genuinely think it's a bad deal they will cut the trade off.

The point here is what happens when they freeze assets,will your still think India is handing You or Usa anything?

There has been a lot of talks and collapse etc.
"But you never believe them,so who cares???

Not predictions, but information...because India is working towards reducing the trade deficit in the short term and becoming a net trade surplus country in the longer term under the new government. BJP did it in 2004 before moving out of the government, BJP can and will do it again.



And now there are people who wants to work on it also, and deliver results.



Rather, we are working on three points.

1. Make everything that we can make for us.

2. Make something for others.

3. Not buy from others things that we can make.

This is exactly the Hindu Concept of "Why chase after milk,when you can drink water comfrotably in your own Home"

Our economic system baffled even KARL MARX! Where he said we are a Village Society where the "Producers are also the same Consumers" ,This Karl Marx has described as Primitive Socialism or whatever term he wanted to coin then.
What Karl marx forgot to mention was Dharma(Duty,Righteousness) Why will a producer become the same Consumer? when he can sell his crop at much higher profit?
Atheists say a lot, but forget their Dharma/Duty and everything when they are born.

I already said that Trump becoming President of USA was good for India long back ago,
But people like @Desertfalcon and you @Chinese-Dragon have some counter arguments to issue.
Our friend here Desertfalcon accused me of being a hater of America as a hindu and Bracketed All Indians as Cunning after hearing his Pakistani friends say how bad we Hindus were.
I also happen to be the person who inherently made him develop hatred towards Indians from my posts.
Good for him! We will need all your hate in future,nothing less we want.

 

[AndrewJin]

Well, that is the correct path at least.

Labour cost is never a major issue in middle-high end manufacturing.
India will have some low-end manufacturing like assembling smart phones.
But she will still have to import key components from East Asia-ASEAN
simply because there are no technology and know-how in India.
It's impossible to build an ecosystem in india alone to counter the whole East Asia-ASEAN chain.
Plus, the productivity per capita in India is too low to make much benefit from India's extremely low labor cost.
If labor cost is that important, why does Foxconn hire even more workers in China these years at $800+ per month with free food and free accommodation instead of exploiting labor in a country where $200 is enough? They will have some factories abroad, but mostly for domestic assumption as opposed to for the purpose of exports.

Many experts argue that, the typical manufacturing road for a big country to transform has been put to an end
after Japan, South Korean, China and ASEAN.
The more assembling lines in India, the more stable East-ASEAN chain will become, since factories in India will import more and more middle-end and high-end components which are the most profitable.
Apple's supplier list

And most mentalities in third-world countries have neglected the ongoing technological revolution.
Under such revolution, u don't need that many workers but you can earn even more.
The future of the majority of developing countries will be doomed.
Unless they stop being overoptimistic that jobs will simply come effortlessly.
Unless they stop holding the self-soothing view that we can do what others have done.
They need to create a new road in this context.

Asia’s dominance in manufacturing will endure. That will make development harder for others

 

[dray]

Well, that is the correct path at least.

Just to add a point here, India now has more than 25 mobile phone manfacturers including Chinese companies that are producing 2/3rd of our total demand domestically, that happened within a short period. In fact Chinese brands are putting large decorative stickers on the mobile boxes stating that it is made in India. Now with time local sourcing of components will only increase. China didn't have all the technology and experties, they got it majorly through outsourcing, same will happen in India. Besides, government is also focusing in electronics manufacturing including chip fabrication. Further, there is no reason to believe that an Indian worker will be less productive than a Chinese worker under similar work conditions, as your compatriot below is suggesting, if that was the case; Indians wouldn't have become the most affluent expats in many western countries including USA. There is no 'never', no 'impossible' here, the process has already started and happening.

Labour cost is never a major issue in middle-high end manufacturing.
India will have some low-end manufacturing like assembling smart phones.
But she will still have to import key components from East Asia-ASEAN
simply because there are no technology and know-how in India.
It's impossible to build an ecosystem in india alone to counter the whole East Asia-ASEAN chain.
Plus, the productivity per capita in India is too low to make much benefit from India's extremely low labor cost.
If labor cost is that important, why does Foxconn hire even more workers in China these years at $800+ per month with free food and free accommodation instead of exploiting labor in a country where $200 is enough? They will have some factories abroad, but mostly for domestic assumption as opposed to for the purpose of exports.
View attachment 306470

Many experts argue that, the typical manufacturing road for a big country to transform has been put to an end
after Japan, South Korean, China and ASEAN.
The more assembling lines in India, the more stable East-ASEAN chain will become, since factories in India will import more and more middle-end and high-end components which are the most profitable.
Apple's supplier list

And most mentalities in third-world countries have neglected the ongoing technological revolution.
Under such revolution, u don't need that many workers but you can earn even more.
The future of the majority of developing countries will be doomed.
Unless they stop being overoptimistic that jobs will simply come effortlessly.
Unless they stop holding the self-soothing view that we can do what others have done.
They need to create a new road in this context.

Asia’s dominance in manufacturing will endure. That will make development harder for others

 

[Daniel808]

Labour cost is never a major issue in middle-high end manufacturing.
India will have some low-end manufacturing like assembling smart phones.
But she will still have to import key components from East Asia-ASEAN
simply because there are no technology and know-how in India.
It's impossible to build an ecosystem in india alone to counter the whole East Asia-ASEAN chain.
Plus, the productivity per capita in India is too low to make much benefit from India's extremely low labor cost.
If labor cost is that important, why does Foxconn hire even more workers in China these years at $800+ per month with free food and free accommodation instead of exploiting labor in a country where $200 is enough? They will have some factories abroad, but mostly for domestic assumption as opposed to for the purpose of exports.
View attachment 306470

Many experts argue that, the typical manufacturing road for a big country to transform has been put to an end
after Japan, South Korean, China and ASEAN.
The more assembling lines in India, the more stable East-ASEAN chain will become, since factories in India will import more and more middle-end and high-end components which are the most profitable.
Apple's supplier list

And most mentalities in third-world countries have neglected the ongoing technological revolution.
Under such revolution, u don't need that many workers but you can earn even more.
The future of the majority of developing countries will be doomed.
Unless they stop being overoptimistic that jobs will simply come effortlessly.
Unless they stop holding the self-soothing view that we can do what others have done.
They need to create a new road in this context.

Asia’s dominance in manufacturing will endure. That will make development harder for others

Very Nice explanation, brother @AndrewJin

Yes, China's Industry today, and in the Near Future will move to Middle-High End Products.
Of Course with More Profit margin.
And Industry with Low End Products will move to Third world Country, like India.

By the way, there is a Very nice article about China's Product Transformation today.

Tanner attributes this drastic about-face in consumer sentiment to four main factors:

1) Many Chinese brands have drastically improved the quality of their products

This is by far the most important driver of this transition: “Made in China” no longer equates to bad. Where China’s manufacturers initially found their niche filling the world’s markets with low cost products they are now also pumping out some of the most sophisticated, cutting edge, and high-quality items available, and consumer sentiment around the world has adjusted accordingly.

2) Chinese consumers are becoming more confident in the social-proof that comes with domestic brands

Foreign brands are no longer anything new in China. They’ve had a major presence in the country for the better part of a generation, and to the young, jet set of the country, international brands like Apple and Starbucks are on the decline as far as their ability to help flaunt their wealth, sophistication, and worldliness and are becoming just anormal part of the landscape — a handful of options to choose from among many others. As some high-end Chinese products are no longer functionally inferior to their foreign counterparts, the footing that international brands once had is eroding fast. The free-falldescent of Apple in China— sales dropping 26 percent so far this year — is just one example of this. According to Tanner, Chinese consumers no longer “need a foreign brand to show they’re cool.”

3) Buying Chinese brands is increasingly being seen as a patriotic act

The desire for Chinese people to support Chinese brands for idealistic or patriotic reasons is also rapidly increasing.

“People will feel encouraged to support a Chinese brand because they are a Chinese person,” Cody Chao, a watcher of China’s tech space, summed up this phenomenon matter-of-factly.

Key opinion leaders, such as the First Lady Peng Liyuan, who is very public about exclusively wearing only Chinese fashion, are bringing domestic brands into the forefront and having a major influence on China’s consumers. Tanner explained that in October 2012, World Luxury Association found that 86% of Chinese consumers refused to buy domestic luxury products because of their country’s reputation for cheap goods. Then, just 18-months later, after what has been dubbed the “Peng Liyuan effect,” this number fell to 9%, according to research by Added Value.

“If we look back to 2011, 31% of Chinese consumers wanted to support Chinese companies by buying Chinese goods,” Tanner said. “Just a year later, it was 43%. It is representative of how fast Chinese consumers are maturing.”

4) Domestic cinema ushers in a renaissance of Chinese culture

Contemporary Chinese culture is being helped big time by the growth of domestic cinema, which is using its soft power to promote Chinese brands similar to the way that Hollywood promotes Western brands like Starbucks and Nike. In 2012, 47.6% of China’s box office was local films, but last year this rose to 62%, which is something that Tanner said shapes national pride and a preference for all things Chinese.


http://www.forbes.com/sites/wadeshepard/2016/05/22/how-made-in-china-became-cool/#6da55f5f3dab

“Chinese are inherently proud of what they’ve achieved in the past generation and are now realizing, ‘Hey, we’re actually a pretty impressive country,’” Tanner concluded.


Proud to be Chinese

 

[1971+]

& this guy is leading Clinton in latest national opinion polls. & opinion polls in US are pretty much accurate unlike the ones in India!

Lead is narrow or substantive ?? Anyways 8 years of Republican rule in US is due. There is round robin of 8 years in US .

Ah Indians and their lewd dreams.

I think you haven't noticed that Columnist is non-Indian entity in fact he happens to be a US diplomat.

Anyway US even in it's current Avatar is sufficient for us.

http://tribune.com.pk/story/1108475/obama-confirms-taliban-leaders-death-us-strike/

 

[AndrewJin]

Very Nice explanation, brother @AndrewJin

Yes, China's Industry today, and in the Near Future will move to Middle-High End Products.
Of Course with More Profit margin.
And Industry with Low End Products will move to Third world Country, like India.

By the way, there is a Very nice article about China's Product Transformation today.



“Chinese are inherently proud of what they’ve achieved in the past generation and are now realizing, ‘Hey, we’re actually a pretty impressive country,’” Tanner concluded.


Proud to be Chinese

Yes, more and more indigenous brands are emerging globally.
Five years ago, you wouldn't imagine DJI drones sold in Apple stores and priced much higher than US drones.
China is of course climbing up in the manufacturing chain with unstoppable momentum.
What I'd like convey here is, even China is climbing up, the low-end industries are more likely to be redistributed in this region, shaped by the coming RCEP(ASEAN+China+Korea+Japan+other partners in Asia-Pacific).
This market is the biggest in the world with the biggest number of affluent middle class and biggest number of skilled workers, technicians and scientists.
East Asia-ASEAN is only becoming stronger and stronger every single day.