With everything India has pulled on Xiaomi, Oppo, ZTE etc, any Chinese company that invests in India gets what they deserve. I have no sympathy for anyone stupid enough to believe India is a safe place to invest.
Chinese Economics Thread
- Thread starter Norfolk
- Start date
Speaking of Chinese investment in India, didn't BYD invest recently? Time will tell if BYD reverse the trend or go down like everyone else. It would be ironic because BYD is doing fine in USA and Japan of all places. If somehow India is more hostile than USA(geopolitical rival) and Japan(biggest automobile rival and historical enemy) that would be funny.
Much of the last few pages of comments should be moved to the Indian economics thread as they have little to do with Chinese economy.
I would not have replied in the first place if tphuang's post only requested other members not to include India in discussion. I do see it as a reasonable request. Although I don't have a problem with other members look down at India, many posts are off topic and unproductive.
However, when tphuang decided to include his opinion that moving low end manufacturing to other countries including India is a wise thing to do, then it is a fair game and on topic to reply that why I think this is such a bad idea especially for moving to India.
As for my posts being borders on racism, I reread a few times and I disagree.
1. My first reply I only mentioned India as being a notorious difficult place to do business. Is it racism? I certainly don't think so. Why, because I can also say China when it first opened up for business in late 70s to early 80s is also notorious difficult place to do business. It is a fact.
2. My second reply I mentioned two things. First, I again mentioned Indians are difficult to conduct business with. I am stated it as my and my friends experience. Does that mean I think Indians are bad people, of course not. However, I just don't like to deal with people who have the habit of placing a big order in order to haggle an extremely low price but then in the end only want a tiny amount and refuse to accept the rest of the order. And no, it isn't just one or two Indians do this.
Second, I stated another fact that are many Chinese companies from state owned to small business didn't receive their payment after jobs are done or products were sent. Xiaomi, vivo and oppo all got fined for tax evasion are another fact. India is China's rival and investing in India is not such a good idea is another fact.
3. My third reply to tphuang is again India is difficult place to do business. In addition, India has many issues that need to fix. Again, I would like to mention when China first opening up, China had many issues also such as too much bureaucracy, not knowing who is in charge, ever changing policies and laws. Is that racism or just a fact?
Moreover, I also mentioned India didn't earn my respect as a great power and India hasn't fulfilled its full potential. Isn't it a fact that India hasn't achieved its potential.
Personally, I don't post much about India. But I am fine with you guys want to ask members to tone down India's topic.
Sorry, I just don't see anything in my posts that should be considered racism. I didn't consider disrespecting India is racism.
I think you guys might be too sensitive of some of things certain members said here about India. It's true that some members might have degraded India but many members truly feel India is a failure and are being critical of it.
Read the posts that I've linked to and quoted.
Yourself and others are directly talking about Indian people, in a manner that implies there is a certain inherent nature about Indian people, based on combination of personal anecdote and assumption.
That is indeed bordering on racism and is certainly chauvinistic. Replace the word "Indian" with "Chinese" or any other ethnicity, and you may begin to recognize why those statements are problematic.
If you and others want to talk about actual economics related topics that happen to involve India (whether it's related to offshoring manufacturing, or investment policies abroad), then that is okay. As I said, I have no issue with those posts.
However if you and others want to discuss that, then I expect everyone to exert some discipline upon themselves and to remain well on topic and to not bring up India randomly in a thread when it did not have any relationship to the discussion prior for the sake of nation bashing -- and certainly I expect everyone to not make statements about people of other ethnicities with tones that border on racism.
And yes, the above two paragraphs are in red, indicating this is a statement in capacity as moderator. India specific nation bashing and increasing posts that disparage Indian people are becoming more common on this forum, and it is time for people to draw it backwards.
This will be my last post on this occasion about the topic. If you or others wonder about where the line is, then the simple solution is just to don't post about the topic and choose a different thread.
In my opinion, trying to retain low-end manufacturing like some here have suggested is trying to catch a horse which has already bolted out of the barn.
The fact is that China has moved up the value-chain over the past decade, clearly ahead of any regional rivals. Therefore, the only way to retain some of these low-end manufacturing would be to artificially stunt China's development and keep it poor. That's a non-starter.
Going forward, China's economy cannot rely on labour growth. So the only other way is to grow your productivity.
How do you grow productivity in your manufacturing? Fewer people and more robots. So jobs will be harder to get but pay better. Folks here forget that China still has ~20% of its workforce engaged in agriculture! Most developed countries have no more than 1-2%.
The only sector that can absorb all these people is the service sector. That should happen without widespread deindustrialisation, which is the mistake that the West did. To me, that is the key challenge that China faces.
But I am not very worried that China will lose out on industrial prowess. Some amount of low-end manufacturing has to be let go. Why not be pro-active about that as tphuang suggests and buy political goodwill in the process? It will happen anyway, might as well try to make it on your own terms.
The fact is that China has moved up the value-chain over the past decade, clearly ahead of any regional rivals. Therefore, the only way to retain some of these low-end manufacturing would be to artificially stunt China's development and keep it poor. That's a non-starter.
Going forward, China's economy cannot rely on labour growth. So the only other way is to grow your productivity.
How do you grow productivity in your manufacturing? Fewer people and more robots. So jobs will be harder to get but pay better. Folks here forget that China still has ~20% of its workforce engaged in agriculture! Most developed countries have no more than 1-2%.
The only sector that can absorb all these people is the service sector. That should happen without widespread deindustrialisation, which is the mistake that the West did. To me, that is the key challenge that China faces.
But I am not very worried that China will lose out on industrial prowess. Some amount of low-end manufacturing has to be let go. Why not be pro-active about that as tphuang suggests and buy political goodwill in the process? It will happen anyway, might as well try to make it on your own terms.
China has already made a choice about inevitably losing some industries. Its called RCEP
China can't choose to not lose some industries, but it certainly can choose/influence where these industries will go
The thing is US can actually pay back most of the time and provide some type of exchange whereas India does not.
Just add that much of the low-end manfacturing are typically downstream segments, while relocated out of China, these downstream segments are still part of the Chinese manufacturing supply chain, and are owned & operated by Chinese factories/industries in the form of overseas subsidiaries.
The first to move were electroplating plants more than a decade ago as these were extremely energy intensive and polluting, next were textiles (and some toy) factories as these were labor intensive, and even a decade ago, recruiting boys and gals off the countryside for factory work was already very difficult as rural incomes were increasing.
For those Chinese factories that moved up the value chain, their manufacturing stayed in China as productivity is higher in China than in Vietnam, Cambodia, Phillipines or India. Across many products types, from textiles, shoes to white goods, consumer electronics etc., Chinese manufactruring specialises in quick small-to-large batch manufacturing and extra fast turnaround times, that's unmatched anywhere in the world. Buyers/importers pay more (unit cost) but they get huge value-added in efficiency and flexibility, which ends up reducing their overall costs in the long run.