Is China and India's rise overstated?

[1heckofaguy]

Especially China's? will its problems bite it in the bum in the medium/long term like the strict authoritarianism, its ageing population, poor working conditions/rights and pay for its masses, its seeming lack of original innovation etc etc.

 

Are western companies just using and abusing China and India while they can, before those two countries eventually implode from within?

[cgksheff]

Nope.

 

You need to realise how China has spread out into all continents.

 

Many areas of the southern continents have been financially re-colonised by folk who have very little interest in the indigineous population.

 

African countries that warranted their independence from European management are now labouring under Chinese/Malaysian/Indonesian profiteers.

 

You may or may not be surprised to learn how much Chinese wealth has been invested into hard assets in Europe & America.

 

India .. I know less about.

 

 

We in Europe should worry more.

We have become more dependent on the cheap goods and services from these areas.

As they continue to develop, their proportion of available cheap labour will decrease, and we will be seeing a rise in the cost of the goods and services that we take from overseas.

 

It costs more to set up and run a factory in Korea than in England.

 

I was once shown the analogy of how cheap labour has fueled all development since the industrial revolution.

In England we took cheap labour off the farms and into the factories.

As our middle-class was created and expanded we needed to look elsewhere for our cheap labour.

Imagine that change has expanded outwards and around the globe.

Eventually, all the source of people to change from cheap labour taken from agriculturally based villages will have been exhausted.

 

When that bubble explodes .... we are in deep do-do.

 

Will we end up mining our coal again for export to China?

 

What do we have as a country to sustain an income in the future?

[1heckofaguy]

Thanks for all that cjk, but I'm asking if going forward, China can sustain it long term given the ticking time bomb problems I've mentioned.

[geared]

The people in control of China seem abit more sensible.

 

They've already made several announcements on how they will begin to reign in growth an manage it down to a lower but more sustainable rate of around 7%.

 

Unlike Western governments who boom as long as possible and then go bust the Chinese are putting the brakes on now to avoid the economy crashing.

[L00b]

its seeming lack of original innovation

That is a fallacy perpetuated by years of prejudice (which was originally justified).

 

China these days is a powerhouse of technological innovation. Has been consistently for the last 3 years at least.

 

If you want an analogy, look at how Japan did their "tech transfer trick" in 30-odd years: from 3rd world economy (post-WWII) to global poster child for technological innovation from the late 80s onwards, via mass-copying ('transfer') of Western tech on the back of ultra-cheap skilled labour with no regard howsoever for IP.

 

China has effectively done the exact same "tech transfer trick" in less than 10. With a far less insular mentality than Japan, they've been just as quick with reinvesting the proceeds internationally as explained by cgksheff.

 

We're playing a game of chess, they're playing a game of Go: Europe and the US should be afraid. Very much so. 'Hand-on' persons at the coalface (mostly CEOs of hi-tech/defense/pharma/etc Corps/Cos) have been awhile.