India And China: A New Millennium

Since the 90s of last century, China has been miraculously rising by Fourth International Industrial pfers. In 2014, 80% of the world's air conditioners, 84% of mobile phones, and 60% of the total.

It's made in China.

However, the passage of time is changing, and the industry reflux in developed countries is happening simultaneously with the rise of manufacturing industries in less developed countries. Can China form a global manufacturing center instead of China?

In seventh Century ad, the great Tang Monk Xuan Zang left Changan of Kyoto and resolutely set foot on the ancient Silk Road and went to the remote western world to explore the true meaning of Buddhism.

The snow forest in the desert, the fortress of forest, he has been through a disaster, and has been killed for a long time.

This kingdom of Tianzhu is India, which is also known as the four ancient civilizations of ancient China.

Not long ago, the Prime Minister of India, Modi, visited China and made a special trip to the ancient city of Xi'an.

Millennial love

More than one thousand years later, history has brought together the two tribulations and tribulations.

In the 90s of last century, China took the lead in the miracle of the great shift of international manufacturing industry, and erected the flag of China made in the world and became the second largest economy in the world.

Thirty years later, India's resource endowments similar to China follow China's footsteps and are known as a new manufacturing power that can subvert China's manufacturing industry.

In 1990, China accounted for less than 3% of the total global manufacturing output value, and now it is close to 25%.

By the end of last year, 80% of the world's air conditioners, 84% of mobile phones and 60% of shoes were made in China.

The supply chain formed by the rapid development of China's manufacturing industry has penetrated all over Southeast Asia.

Today, almost half of the world's products are made up of "Asian big factories" with China as the core.

As China's manufacturing weathervane, Foxconn announced that it will invest $5 billion to build factories in India and open up new manufacturing bases.

Terry Gou said that Foxconn decided to build 10 to 12 production plants in India by 2020, and will expand its plant locations to other India states in the next 5 years.

In addition, Foxconn will invest in India Internet start-ups, small businesses and local mobile phone manufacturers.

Coincidentally, including TCL, HUAWEI, millet and a number of indigenous enterprises in China, they also plan to move their production base to India.

As a result, China has gradually lost its general manufacturing advantage. Today, the world has cast its eyes on the South Asian countries, which are also known as BRICs, China.

Obviously, as the overcapacity of China's manufacturing industry intensifies, the cost of manpower is soaring, and the trade surplus conflicts intensify, many manufacturing enterprises begin to shift part of their production capacity to countries with lower labor costs, such as India.

With the arrival of this wave of migration, whether India will become the next "world factory" has attracted worldwide attention.

Look at the resource endowment of India

Looking back at the trajectory of global manufacturing pfer, the global manufacturing industry has been "made in Britain", "made in America", "made in Japan", "made in Germany" and "made in China" at present.

The basic path of manufacturing pfer is always migrated according to resource endowments, which is very similar to the "grass by water" of nomadic tribes.

Therefore, it is necessary for us to observe and observe the resource endowment of India.

India is located in the subcontinent of India, South Asia. It is a member of the Commonwealth. Its territory area is 298 million square kilometers. In 2014, the population of India has exceeded 1 billion 270 million (China is 1 billion 370 million).

The ancient Indians created brilliant ancient civilization, the birthplace of Buddhism in the three major religions of the world.

India is one of the fastest growing countries in the world. India has shown prominently in the export of software industry. The rapid development of finance, scientific research, education and technology services has also made the world take a look at it.

In 2014, India's GDP was 11 billion 345 million rupees, or about 1 trillion and 830 billion US dollars, and GDP's growth rate remained the world leader for many years.

Since his election as Prime Minister of India, Modi has promised to vigorously change the old and eliminate the disadvantages and vigorously push forward the reform in the economic field.

International analysts generally believe that although India's political situation is complicated, India has shown a relatively rapid rise in many fields, and this trend will not be reversed.

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Compared with China's past planned economic system, India has implemented the capitalist economic system for a long time. Therefore, the proportion of state-owned enterprises in India is very low.

It can be predicted that this will be the rising trend in India.

Will bring endless vitality.

In addition, India's long-term implementation of the capitalist system will not be hostile to western society in the ideological field. It should be seen that this is a huge potential advantage of India.

Since the implementation of the comprehensive economic reform in India, India's economic development has made remarkable achievements. However, under the halo of its high growth, it is difficult to hide many sharp contradictions.

For example, the problem of poverty is prominent, the development is unbalanced, the distribution of social wealth is unfair, the problem of racial hierarchy is serious, the industrial structure is not reasonable, and the fiscal deficit is high.

At the same time, backward infrastructure and complex policy environment are also obstacles to India's manufacturing industry.

In short, India's economic reform faces many challenges and believes that the road of economic development in the future will never go all the way.

Problems faced by China's manufacturing industry

Since 1990s, under the impetus of superior natural endowments, the global manufacturing industry has been rapidly shifting to the coastal areas of China. China has successfully seized the opportunity to catch up with the international industrial pfer and realized the rise of great powers.

However, the passage of time and the turning of the times have brought about changes in the international and domestic environment.

Under the impact of global economic crisis in recent years, the international industrial environment has undergone profound changes. China's manufacturing industry is facing unprecedented pressure.

Ten years ago, manufacturing costs in China were very low, and the cost of manufacturing industry surged today, mainly because of the huge increase in wages of Chinese workers. China rose from $4.35 in 2004 to $12.47 in 2014, or 187%.

The two is the exchange rate. From 2004 to 2014, the exchange rate of RMB against the US dollar increased by 35%.

Despite the recent devaluation of RMB 4.6%, it is difficult to change the general trend.

The three is the cost of energy. China's electricity consumption rose from US $7 / kwh in 2004 to US $11 / kwh in 2014, while the cost of natural gas rose from 5.8 US $1 million to 13.7 US dollars, or 138%.

From the perspective of business environment, China's manufacturing industry is faced with some deep-seated problems at the same time.

First, the history of world industrial development has proved that the strength of a country's economy stems from its endless private industrial entities, and private entities are also strong sources of technological innovation, creating employment.

The main force.

In China, monopoly state-owned enterprises with 2/3 of social wealth and various scarce resources are mercilessly squeezing the living space of private enterprises, making the survival and development of private enterprises difficult and almost collapse.

Second, the mode of economic growth has made the sustainable development of manufacturing industry exhausted.

In the past, the three carriages of China's economic growth were mainly driven by exports.

With the global economic downturn, export decline can only depend on investment at this time. The investment pattern under these planned economic background causes serious overcapacity in most industries.

At present, China's overall capacity surplus has reached over 30%.

Third, the imbalance between the rich and the poor has led to a long-term slump in domestic demand.

Because of the difficulties in the development of private economy, the proportion of private wealth is relatively small, resulting in the lack of consumption capacity.

The economic structure of the world's developed economies shows that domestic demand is always dominant in a country's sustained economic development, and the sluggish domestic demand is the result of the long-term deformity of the development model.

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Thousands of sails on the side of the sinking boat.

The BCG report released by the US professional agency shows that the manufacturing cost in mainland China has reached 96% in the US, which is almost the same as that in the United States. Recently, New York Times pointed out that the cost of the spinning industry in the mainland exceeded that in the US by 30%.

Once upon a time, "made in China" was once the pride of the Chinese people.

With low cost and other advantages, China once attracted many foreign businessmen to invest in China's manufacturing industry.

However, things are changing and things are changeable. With the gradual disappearance of demographic dividend, "made in China" is encountering an unprecedented crisis.

China is experiencing a hollowing out of manufacturing industry, and its proud industry is losing its aura.

From the perspective of labor supply, China's labor force is showing a downward trend. The 15-59 year old population has shrunk by 660 thousand from 2011 to 2012, while the number of working age population has decreased by 5 million 600 thousand from 2011's peak in 2014.

The revival of high-end manufacturing in developed countries and the struggle for low-end manufacturing pfer in less developed countries are taking place simultaneously, resulting in a two way squeeze on China's manufacturing industry.

In the high-end manufacturing field, there is a sign of reverse pfer to developed countries. Manufacturing industry has become the commanding point of global economic competition.

In China, the age of aging is running, but India is in the youth era.

According to the UN global population outlook, India's 15-59 year old workforce has surpassed China in 2015.

By 2050, the working age of India's workforce will reach 1 billion 50 million, more than 30% of the Chinese working age workforce.

According to the UN's population report, India will surpass China as the world's most populous country by 2020.

This is a historic turning point. China will occupy the most populous country with more than 3 centuries of human history, and the national throne will be left to India.

You know, population means productivity, population means consumption, and population means popularity and influence.

After taking office, Modi launched the "India manufacturing" plan, aiming to increase the proportion of manufacturing to India's economy from 18% to 25%.

Moody's plan to revitalize India's manufacturing industry and "made in China 2025" have overlapped in biotechnology, new energy and other aspects, but the main body is to introduce labor intensive industries, solve employment problems and raise average income.

That is to say, when China wants to challenge the United States, Germany and Japan, India intends to take the place of China instead of the so-called "praying mantis to catch cicada."

Thousands of sails on the side of the sunken boat.

"Made in China" is facing the most serious crisis in 39 years. How to break through the difficult problem of development depends on the wisdom of our generation.

About the author: Zhang Yaohuan, doctor of engineering.

It has been engaged in the aircraft strength test, the pformation of state-owned enterprises, the European market expansion of the world's top 500 enterprises and the international training of multinational enterprises.

In the field of engineering technology, industrial economy and enterprise management, it has certain insight and independent opinions.

Life motto: never drift with the tide.