New World Order

[Vikrant]

China #1, US #2, India #3

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China is set to overtake the U.S. as the world's number one economy, while India has jumped into third place ahead of Japan, according to a new study from the world's leading statistical agencies.

The 2011 International Comparison Program (ICP), which involves the World Bank, assesses economies based on purchasing power parity (PPP), an estimate of the real living costs. The results revealed on Wednesday paint a new and different picture of the global economy compared with the last update in 2005.
The research puts China's gross domestic product (GDP) at 87 percent of the U.S. in 2011 and says the Chinese and Indian economies have more than doubled relative to that of the U.S. In the 2005 study, the ICP believed China's economy was less than half the size of the U.S., at 43 percent.

"The United States remained the world's largest economy, but it was closely followed by China when measured using PPPs. India was now the world's third largest economy, moving ahead of Japan," the report said.

It added: "The results indicate that only a small number of economies have the greatest shares of world GDP. However, the shares of large economies such as China and India have more than doubled relative to that of the United States."

China to overtake US economy; India trumps Japan

 

[seeJudy]

Please set your mind at rest that the world order is still dominated by your country. And China's your market forever.

 

[bianco]

Seems it has been decreed that Chinese/SE Asians and Indians must take over the World.

 

[Vikrant]

Australia is welcome to join in 'taking over' the world.

 

[Vikrant]

This news is getting quite a bit of coverage in the economic circle.

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With the recent news that India has just overtaken Japan to become the world’s third largest economy in PPP terms, China now faces increasing pressure to both hold onto its FDI performance, GDP growth, its manufacturing competitiveness and maintain the domestic political mantra that the country is superior to that of its largest neighbour.

In terms of FDI, China’s rose last year by 5.3 percent, to a whopping US$117.6 billion, albeit at slower rates of increase than previously attained. But even that figure was eclipsed by the 5 largest economies in ASEAN, who achieved FDI inflows of US$128.4 billion. India’s, while smaller at some US$28 billion, still rose by 17 percent over the previous year – an increase over three times higher than that of China’s, and achieved during what was not an entirely satisfactory fiscal or political 12 months for the country. While it is true that the Indian performance comes from a lower economic base, there is some thought that the investment trends are now moving away from China and into other areas of emerging Asia – with ASEAN and India amongst them.

If so, there are some fundamental reasons for this. China has become considerably more expensive in terms of labour costs. It is now five times more expensive to hire a worker in Guangdong than it is in Mumbai. Coupled with that, China’s demographics point to it losing labour force over the coming years, while a much younger India is adding to its pool of available workers. Not only are China’s workers becoming more expensive, there are also less of them. It is that demographic that is now beginning to impact initially upon labour-intensive industries in China, but will rapidly filter down into smaller and medium size businesses with less cash flow to protect them against increasing production costs.

Foxconn, maker of numerous Apple products, are shifting production to Indonesia. Ford have bet their Asian vehicle strategy upon auto-manufacturing plants in Gujarat. Nearby Thailand, and not China, has been chosen by Volkswagen as their manufacturing base for auto sales into Asia. These decisions have been made despite regular comments about China’s infrastructure superiority protecting it from such leakage. Clearly the cost benefits of locating factories elsewhere, even with lower standards of infrastructure, are greater than investing that additional capacity in China. China has not been able to become the manufacturing hub of choice for Asia, let alone the world.

This is having an impact on where global CEOs see future production capacity moving. According to the 2013 Global Manufacturing Competitive Index issued by Deloitte, India currently ranks fourth globally. This report includes over 550 survey responses from CEOs around the world and provides their perspectives on the key drivers of manufacturing competitiveness for a country, a ranking of each nation’s current and future competitiveness, and a review of the public policies creating competitive advantages and disadvantages for key countries and regions around the world. The study also reveals that India will move up from fourth to second position over the next four years.

Meanwhile, even the Chinese Central Government’s desire to propel the majority of its citizens towards middle class consumer status at a rapid pace is beginning to face resistance. Dongguan, the so-called “factory of the world” has shelved, for the time being at least, any further minimum wage hikes as it strives to keep increasingly frustrated business owners competitive – and profitable. If not, they will – and many are – relocate to Vietnam.

The main attraction for many foreign investors now in China is the development of that same middle class consumer base. Currently standing at about 250 million, it is projected to reach 600 million by 2020, a staggering increase. Yet that projection also assumes that China will be able to hold onto its manufacturing base and service the domestic market domestically. That strategy is now starting to look less likely. Vietnam, expected to come into full China-ASEAN Free Trade Compliance by the end of next year, will be able to enjoy duty free exports to China on some 90 percent of all traded products. With Vietnamese wages far lower than China’s, and a lower corporate tax rate in the offing, China will struggle to compete with Vietnam within 18 months. Yet it needs to maintain manufacturing stability and foreign investment inflows at the same time. It’s a balancing act that is beginning to look a little out of kilter.

China stands to produce another 350 million middle class consumers, all wanting modern products, that will increasingly be sourced externally from China. Yet at the same time, fiscal tax revenues on customs duties will drop. That doesn’t really balance the books as far as I can see China sustaining its projected middle class growth. As its population ages, it will become more dependent upon raising taxes to cover health care costs. Yet in multinational trade, exactly the reverse is happening.

India, meanwhile, is a little behind in all this. Its development path is often erratic, and as a democracy it has lacked the one party, single minded drive that has propelled China along the past three decades. Its GDP growth rates have performed at a far wider range than China’s from a low of 3.5 percent last year, from 9.7 percent in 2010, and an expected 6.5 percent this year. That compares with a consistent China deliverable of between 7-8 percent per annum. But the warning signs for China are there. India is not just a home of increasing numbers of workers (expected to double to just under 1 billion by 2025) available at far lower wages than in China, but it also has an alluring domestic middle class – coincidentally the same size as China’s is today, at 250 million. That middle class also has extensive purchasing power and is increasing. International brands are now flocking to India to sell to the domestic market. Yet still, India tends to fall down on infrastructure. That however is changing – investment into infrastructure is racing ahead at close to 8 percent growth per annum – higher than the GDP rate.

When India’s infrastructure gap starts to close – and the signs are already there – it will take just a couple of reforms to kick start India as both the world’s manufacturing hub and its largest consumer market. Those are tax reform, which has been on the agenda for the past three years, with the intent to lower corporate income tax from the current 40 percent rate down to 30 percent, and further FDI reforms into the retail sectors, and especially in agriculture and e-commerce. In the latter especially, India has been able to provide a far more open and transparent market than that of China. With the Chinese government wanting to keep a handle on every possible currency movement out of the country, and as a result supervising the rise of its own online retailers, global online retail businesses such as Amazon and ebay, along with many other e-commerce businesses, have found the going in China very tough. In comparison, the Indian market is starting to open and giants such as Amazon are expecting huge dividends as a result. Put simply, India’s market is more open to foreign investment and participation than China’s.

If these Indian reforms continue to happen – and both political parties contesting the Indian elections currently underway are considered business friendly – then the rise of India may yet cause China some headaches. I will not be surprised if India’s growth in two years from now starts to outpace that of a China that just may have attempted to become too rich, too fast, amongst too many people, with worrying implications for future growth.

- See more at: India?s Rise to World?s Third Largest Economy Puts More Pressure on China to Perform | China Briefing News

 

[Votto]

Seems it has been decreed that Chinese/SE Asians and Indians must take over the World.

It's all about being multicultural.

 

[Vikrant]

Seems it has been decreed that Chinese/SE Asians and Indians must take over the World.

It's all about being multicultural.

The thread was started to discuss recent ranking which placed economy of China, US and India in first, second and third place respectively.

What does it have to do with multiculturalism?

 

[waltky]

Uncle Ferd says China got the right idea...

Welcome to the 'sex capital of China': Inside sin city where it's 'normal' for one man to have several girlfriends who pay him to carry on dating them
2 September 2015 | Dongguan, southern China, is known as the sex capital of the country; The city is also a manufacturing hub and is dubbed the 'world's factory'; It's made headlines again for the problem of too many women to men; Women are having to share boyfriends and pay to keep them happy; Sex hungry workers even shack up with other couples to save rent

A Chinese city has recently come under fire for its culture of polyamorous relationships and kept men. In Dongguan, southern China, a man with several girlfriends who pay to 'keep' him is now the norm, reported People's Daily Online. Most of the young women involved are low-paid factory workers who are hoping to get married to the men in the near future. Chinese media recently published a set of pictures showing many men in Dongguan are holding, kissing or lying in bed with more than one woman.

In a set of pictures published by Chinese media, many Dongguan men are seen holding more than one woman

Dongguan is an important industrial city in southern China's Guangdong province. It's frequently dubbed the 'manufacturing centre of the world' or the 'world's factory', but it also has a reputation as the sex capital of China. After a clean up of the city's sex industry, Dongguan has once again made the headlines as a sleazy metropolis where women share boyfriends and shack up with these kept men. As factory girls are only allocated dorm rooms, shared with other women, many have moved out to rent rooms in the city.

Another picture from the set shows a man is kissing one woman while holding another simultaneously

To save on rent, some are even forced to share rooms, divided by only makeshift fabric curtains, with other couples. The young lovers must take turns to go for walks to give their room mates the time for copulation. While the allegations have shocked the rest of China, the unusual social structure seems to be the norm among the migrant factory workers in the city. One man, named as Li Bin, claims he has three factory girlfriends. He cohabits with one, is in a romantic relationship with another and treats the third as a lover.

A man is seen with four 'girlfriends'. Picture belongs to a set of images from Chinese media on the topic of polyamorous relationships in Dongguan

Li Bin even claims that 'they all know each other'. He said: 'My third girlfriend works close by. She often looked sad so I went to talk to her. 'She proposed that we start dating. I told her "I already have two girlfriends, I can't have a third. We can be lovers," and she agreed.' Another man, referred to as Xiao Lin, revealed that he also has three girlfriends. He said: 'It's very normal. Those who come to make a life are all the same.' Xiao Lin added: 'Several of my friends do it too. One man with several women is very normal.' 'Young and beautiful factory girls are everywhere. They're simple and easy to get along with, why not have several?'

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