The first crack in the Dragon's armour?

#1
This morning's headline in the Economic Times that Blackstone had preferrred India over China and Japan for a US$ 1b investment was great.

Believe it or not, friends, India is at the break out stage. Things are moving...

The Chinese don't like speaking English.

Foreign investors feel more comfortable on a personal level with an Indian than with a Chinese, because, overall Chinese Trade policies are more destructive than constructive. Look how China flooded the US markets with textiles as soon as the quotas were lifted, leading to the closure of many US textile mills. China doesn't believe in letting others live.

Apart from this, China has to atone for major atrocities committed upon Tibet and Tibetans, and I feel that the time for this Karma to bear fruit is soon going to happen.

Something is going to give in China. 75% of their population are living in disparity , and the progress is only enjoyed by 25% of the population.

China doesn't have a burgeoning and well-educated middle class like India does.

The Chinese currency is running at an artificial level, so that US imports from China. The moment China revalues its currency, other Asian markets will rise, because US will prefer importing from these markets.

The world equation regarding India's position is going to change quite soon.

For all you know, the Sensex could double in the next 10 years ...........

Jai Hind,

Uday.
 
#2
Hi UDAY,
Ur passage is quite interesting and thought provoking.But before being too protestive on the aggresive policies followed by China,I think we need to ponder on the fact that,---it is not only China,who is in this rat race,---but the United Staes of America itself as well as some of the other so called developed nations ,r all in the same platform,---and can be critised for the same offence.

That Chinese do not speak English---is also a half truth.Moreover any nation boosting its national language should be praised ,for it gives rise to the national feeling in a greater grandure.
I always do not unserstand why the importing factor of the U.S. gets a greater precedence over the importing factors of other nations.I think this is a serious flaw in our thoughts.Not that I am anti U.S.,but I truely believe that the balance of power should be more or less equally distributed among the developed and the developing nations--- and not one sided for the success ful economic growth of the entire world.
And regarding the break out stage of INDIA----I think it is only possible if most the Indians come out of their ameturist attitude and become self dependent.Our government should try to prevent the brain drainage,by proving greater infrastructures ,adequate modern facitilities and a competitive package for livelihood.

Also ,the economists of our country need to seriously give up the westernised macro -economic model and have their thoughts in a new dimension.In the 1980s ,when INDIA and CHINA were in the same platform, then why and how did China make a mommoth advancement,while India went on lagging behind?(not truely in all aspects,but in most of them.)
We need to undertand that what befits in the western economy,may not be prevelent in the Indian perspective,---for no two fingers r same.

This is what probably China realised long ago,and they made their own economic model which let to a great success-if not a grand one.
I think we need to come out of the stage of critising one another ---be it China,or U.S.,or any other nation,---and try to look at our own mass education in the truest sense---be it in the field of language,or science and technology or the stock market.
Once each and every individual realses their true infinite potentials,--then the process of overall development will be automatically infused ,and India will emerge as a global superpower in the truest sense.
Regards,
joy_mitali
 
#3
Hi Joy,

You being a smart cookie have caught my pro-India and anti-China bias.

I am jealous of the development in China and the absence of the same development in India.

I am even more angry with the Indian authorities for their policies that did not allow us to grow the way China did.

All the same, I have a nagging feeling that the Chinese have developed too, too fast over the last 10 years, maybe too fast for their digestion, and enough to give a running stomach very soon.

Dont know if the current world powers will allow equal distribution of this power without learning a few hard lessons,

Nevertheless, I also feel, without proof as of now, that in 20 odd years, when India does enjoy sizable power in the world, our Sanskars will make us deal maturely with the power, allowing for its even distribution, a task at which the current power-holders are failing.

Also, though I wasn't born then, and only heard about the India-China war of 1962 from elders, the story told to me was that there was a treaty of understanding between India and China which China broke when it attacked India.

Look what China did to Tibet. It destroyed Tibet's language, its monastries, many of its monks and nuns........., Tibets beautiful land was polluted with nuclear waste.......these are Nazi-equivalent atrocities, and China will pay with its life for this.

Were it not for India, the entire Tibetan culture would have been wiped out.

I am going to find it very hard to trust China.

My dad deals with Chinese wool-merchants, and he regularly faces problems with containers of imported Chinese wool. The contents of the containers are partly of inferior qulaity than the quality agreed upon as per LC. Recently my dad stopped payment. The Chinese party came to India and was vehement. My dad disregarded the arrogance and made his point. The Chinese businessman's eyes did pop out when he saw some of the really developed textile factories of Panipat. He couldn't believe that India was developing too.

Look at most of the goods coming to India from China. It's really 3rd rate stuff, which breaks in a weeks time. Then the Chinese government is willing to swallow losses of any manufacturer that goes bankrupt in China.

Boy, these are policies of a new Economics, and thank God Adam Smith and Co. aren't around, but they may be turning in their graves.......

Anyway, here's to China,

Uday.
 
#4
Second Crack

Headline in Economic Times today -

"Mckinsey study rates India ahead of China".

Apparently, Mckinsey feels on the basis of their research, that India's GDP has grown faster than China's in last 10 - 12 years.

Uday.
 
#5
Third Crack

Wal-Mart textile suppliers crossing over to India from China on Yuan pressure,

Another crack in the Dragon's armour,

Uday.
 
#6
The Wal-Mart Crack is a big one....

Judging by the excitement in the Panipat textile industry, the Wal-
Mart crack in China's armour is a big one.

Many other big players are expected to follow Wal-Mart's lead into India.

My brother, who is a world-wide textiles exporter, was saying that if Wal-Mart comes into India in full capacity, the entire nation's textile production might not be enough in the bonanza that will follow....

Uday.
 
#7
Hi Uday,
Reading a lot about Wal-mart's arrival in India,now-a days.Not much knowledge in textiles,---though my father was a textile chemist(expired long ago,when I was doing my graduations)----Also the international community is applying a lot of pressure to revaluate its currency.---though todays headlines in ET is that China is refusing to bow down to intrnational pressure.
But then ,one thing I seriously ask u to give a thought---
1)Is India truely prepared to supply in accordance to international demands?
2)IS China going to sit and watch?
3)Will the boom continue after a year?
4)What happens when Walmart and others resells the finished products back to India?
5)How does the Indian economy actually benefit from it?

Maybe u were correct.The chinese r now gettng caught in their own nets.But then u folks make it sure yhat u also do not make the same mistake,and finally become a prey of the international community after a short time.
Regards,
joy_mitali
 
#8
Appropriate questions, and the right time to ask,

1). India, in my view, will take about 5 - 7 years to gear up properly to supply to international demands in the textile sector. We've always been "late-Lateefs", but this time the bus is stopping on our grounds by default, so I guess we won't be faring as badly overall as we normally do.

2). Of course China will be doing its utmost to regain any lost market share. But since a lot of their international trade policies have been destructive, it might boil down to the trust issue - Whether the international community is willing to place their trust (their destinies) in China's hands. As of now, I would answer this with a no. The international community might just opt for India with all its problems.

3). I think the boom will continue for India, because the other emerging economies are Brazil and Mexico, and they are definitely behind us as far as development goes. I feel the critical mass has been reached in India and the nuclear reaction has been set in motion.

4). Wal-mart and co might consider reselling their products here, but a lot of upmarket India buys clothes at joints like Fashion Street or Sarojini Nagar, so I don't think Wal-mart and co will be able to sell the same stuff in India very well.

5). Benefits to Indian economy - Jobs, Infrastructure and Machinery sectors, Foreign exchange reserves all go up, while trade deficit goes down, ......

Now to the downside. We had a meeting yesterday of the partners in our group of companies on the China issue. There's a chance that in 2 - 3 years time, the likes of companies like Gokuldas Exports or even Wal-Mart come and buy us all out with offers that over-compensate us. This will not be good for India if an MNC is involved. The chances are very high of 90% of the textile industry in Panipat selling out at exorbitant rates. The vectors for this to happen have been set in motion,

Interesting questions,

Regards,

Uday.
 
#9
Some Number-Crunching

We were doing some number-crunching yesterday.

The entire textile industry in Panipat is worth about 5000 Cr. Thats about 1.1 billion US$.

What's a billion odd dollars for Walmart, K-mart and Target put together? Not to mention the other top 50 textile cum home-furnishing buyers in the world.

Peanuts. With the West looking insecure, these folks are in the process of investing safely in more secure markets of today.....

These folks can buy us out in a flash.

A very potent scenario is developing, which could reflect a world-order change, and this the MNCs will try to prevent ... ... .
 
#10
Hi Uday ,
I understand ur fear.Not just urs, ---it would be a fear of our nation too----of which we all are a part----hope our politicians and the mass(specially all the small and medium scaled textile mill owners)understands the prospects, as well the gravity of the situation ,and proceed in a well planned strategic way.

U being someome ,who has been exposed to the western cultures and their aggresive attitude of carrying forward businesses,---and a few others who have a similar exposure---should take an initiative to bring all the mill owners to a common platform(the process may have been already initiated---but I have every doubt regarding the formation of a united front--after all in a country where there is so much of diversifications,with so little mass education,this is bound to be a common feature )

From now onwards---it will be a chess game,--where the more prepared player ,with all the imaginative skills of forseeing future moves and contermoves will turn out to be a winner---I personally would be the happiest,if it is a stalemate,---and both the parties r in a win win situation.

Regards,
joy_mitali
 

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