India vs China? --- Or China vs. Latin America
"Many people are tired of the India vs. China debate. After all, India and China are more likely to be complementary than substitute to each other. One is better in hardware while the other is better in software, there is more opportunities for cooperation.
There absolute loser from China?s rise in world production is actually Latin America. Latin America has much higher wage level than China, Thailand, or Malaysia. The region however is much backward in production technology. This is not going to be sustainable. In a ?flattened world?, no importers are willing to pay higher price for lower quality products.
The Inter-American Development Bank has just published a book on this very topic, titled The Emergence of China: Opportunities and Challenges for Latin America and the Caribbean."
My thoughts (without having had a closer look at the report, yet):
a) I don't think that India and China are so "complementary". India's problem is infrastructure, once they solve this, they'll kick ass. China, however, needs to radically overhaul its political and social foundations, which currently (and even more in the future) will jeopardise further economic development.
b) Maybe it is Morales, Chavez & Co. actual strategy to emulate China by introducing a crude version of socialism?
posted by Thomas at 8:27 AM
3 Comments:
Interesting! My immediate thought is that if India does solve its infrastructure problem (mainly national transport networks, electricity) and reform some of its archaic labour laws, its manufacturing capacity will begin to maybe not challenge but at least trouble China and Latin America. This could well be a 3 way struggle and I don't think any of the 3 players will find a niche and stick with it. India will continue to try to compete in manufacturing, China is already ramping up SEZs for IT related businesses and ensuring its younger population learns English (thus targetting the outsourcing pie) and if stability does prevail in Lat-Am without sputtering socialists, its proximity to the US both distance & time zone wise will give it a big edge over both China & India.
This report should be interesting to read.
9:53 AM
China's most urgent worry actually is it's ageing population. The country is estimated to have about 100 million fewer young people because of the 1-child policy.
In about 20 years, the country is going to be crushed from a massively old population and not enough people contributing to social security. Think Western Europe literally 20 times over!
I agree with Abhi but would be a little more gung-ho about India's prospects over Latin America. Once infrastructure gets in place, India's going to get far ahead. 1/4t of every person under 25 in the world today, is an Indian....
4:09 PM
ageing population is one of the broken social foundations i referred to. one child policy is coming back to haunt you ...
more: social fragmentation (rural/urban; east/west, etc.) and ideological clashes.
however, one of my key impressions from my latest trip to india was that india needs to be very careful about the development of social fragmentations as well. latin america in the 80s/90s (and still today) has proven the dramatic twist such divsions can turn, isn't it?
4:39 PM
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