China vs India; economics perspective

[phk]

    HUTONG SCHOOL BUSINESS PANEL: "China and India : Unity in Similarities", by Mr. Laurentius Metaal, Director of Lehman & Co Time: Thursday 15th of December at 19h00 Place: Bo House (on the eastern side of the Bell Tower (see map)

    When discussing future developments in the global economy, it has become very common to mention both China and India as the big economic superpowers of the 21st century. Mr. Metaal will take a closer look at the similarities and differences between these two Asian economic powerhouses in the making by comparing various macro-economic, social and human indicators of both nations.

    Mr. Metaal is Director of Lehman & Co, a firm with six offices in China and Mongolia that specializes in outbound investments, fraud and Due Diligence investigations, turnarounds as well as liquidation of enterprises in China. He studied Human Geography both at the University of Amsterdam and Nehru University in New Delhi, India. He did research on Delhi's urban public transportation system at the Indian Institute of Technology in Delhi. Since 1995 he has been active as a manager in various companies and sectors in China, the US and the Netherlands. Given his academic and professional experiences both in India and China, Mr. Metaal will undoubtely offer interesting analyses and challenging predictions about China and India and their future role in the global economy.

It was great to hear this guy use all the econimics terminology to compare the two countries. Firstly, I have traveled/lived a decent amount in both places. Second, I am learning a lot about economics through this lecture series of MP3s. Thirdly, I've read Friedman books and traveling to an emerging market such as China makes everybody understand the power and importance of economics.

There were so many interesting tidbits of information. Most were "intellectual entertainment" but I pressed him further for information that may help in my research for technology for emerging markets. Some random notes:


    * India towards service, China manufacturing. Latter requires infrastructure, former requires broader education.

    * India more rural, less urbanization/migration. 'Villages' in China may still have elite rich buying iPods.

    * India's protectionism vs. China's FDI; India is ruled by a few big families that one can't compete with.

    * India's corruption rampant through the system, China's focused at top; China much more efficient for e.g. starting a business.

    * India's 200 million emerging middle class clamor for imported products.

    * Women in India worse-off, can't get jobs. China more equal, women enter labor force more. This makes China's future brighter.

    * India doesn't build infrastructure for foreign-companies, so FDI goes into services. Does this mean in the future, if world is service-based economy, India will be better-off?

    * Indian engineers better than Chinese, more broadly-educated.

[muon2]

Does he mention the long tem population  problem in China. There is such a deficit of women to men that in 50 years China could see a contracting population as Russia does today. There will certainly be an age inversion in China causing social service problems like in the West.

India does not have that demographic problem. If one considers the entire 21st century, India seems much better situated to be a long-tem economic power.

[opebo]

Does he mention the long tem population  problem in China. There is such a deficit of women to men that in 50 years China could see a contracting population as Russia does today. There will certainly be an age inversion in China causing social service problems like in the West.

Actually the woman-deficit is not the primary cause of China's eventual population decline.  Rather, it is simply too few children per woman, like in most of the world.  India also has a good deal of a woman-deficit due to abortions of female children and the immolations of disobedient or merely inconvenient wives. 

Lastly, Russia has a considerable deficit of males, due to the much lower life expectancy of males there, but obviously this is mainly in the older, non childbearing years and has little effect on reproduction.

India does not have that demographic problem. If one considers the entire 21st century, India seems much better situated to be a long-tem economic power.
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[muon2]

Does he mention the long tem population  problem in China. There is such a deficit of women to men that in 50 years China could see a contracting population as Russia does today. There will certainly be an age inversion in China causing social service problems like in the West.

Actually the woman-deficit is not the primary cause of China's eventual population decline.  Rather, it is simply too few children per woman, like in most of the world.  India also has a good deal of a woman-deficit due to abortions of female children and the immolations of disobedient or merely inconvenient wives. 

Lastly, Russia has a considerable deficit of males, due to the much lower life expectancy of males there, but obviously this is mainly in the older, non childbearing years and has little effect on reproduction.

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I went back and looked at some data, and it would seem that both factors are at play in China. There is a dropping fertility rate and a 117 to 100 male to female birth rate due to preferential abortion of females. Considering both factors, one demographer (Phillip Longman) has China begin to shrink its work force by 2020, and have 30% of its population over 60 by 2050.

India does also have some of the same preference for boy babies, but the lack of a national "one child" policy makes the effect less extreme. India also has some religious groups that will continue to favor larger families. These are generally lacking in China. So China may see a greater drop in fertility than India.