..unless either of the two mess up insanely bad
We'll probably get to the #3 spot if things go well. But it seems impossible that we'll ever go beyond that.
Internal reasons that are very hard to fix:-
(1) Our population TFR fell below standard replacement rate in 2023. This means we will not be able to follow the same economic growth trajectory required to reach developed status before population stagnation or declination. This is not a death knell but definitely very VERY bad news.
(2) Our blue-collar workforce skill levels are not only subpar but are slowly falling behind the world standards every year. Much of our youth aim to join government orgs like the Army or the Railways which train for the job later, not before. Despite a national shortage of skilled plumbers, electricians etc, our vocational training orgs have been unsuccessful in attracting people towards these careers as well as churning out skilled workers.
(3) Our bureaucratic environment is extremely slow with pathetic turnaround times on initiatives. This is not government specific and has always been the case so it seems like this will always be. This is not even a problem unique to India as many other countries have been facing this too but it is still a factor that negatively impacts our growth massively.
I wish it was just internal reasons but a large part of it also comes down to both China and US being aggressively great at ensuring their successes:-
(1) Chinese manufacturing seems nearly impossible to overcome - not just for India but also for the US. Yes, we might win over some industries and companies like the US, Vietnam, Thailand etc. have been doing but the amount of autocratic control in China allows them to crush competition easily. Case in point - the recent tussle between India and China on solar manufacturing which China won by autocratically lowering their prices.
(2) If de-dollarisation succeeds, it will benefit China the most because (contd. in comments)
Let's do our part, instead FOMO, have an abundance mindset,keep building and shipping.
Yes, I agree. #3 won't be too bad (in fact fantastic), if we get there.
The question we should be asking ourselves is how do we get there? This is a question all of us should be discussing with each other despite our differences. The day we stop having constructive conversations with each other is the day we stop making meaningful progress.
From a global macro point of view, We are going to definitely have broken supply chain, we need to ramp up manufacturing. I am sure we can't do it like China did with cheap labour so we need to leap frog to robotic manufacturing.
We have done this in the past, we leapfrogged to service sector from agri without manufacturing, we leapfrogged to mobile first without computers.
We should leapfrog to robotic manufacturing. The Worlds biggest disadvantage is our strength that is we have working age population. We have the potential have teleoperated robotic services across the west and aging countries.
(2) If de-dollarisation succeeds, it will benefit China the most because of their already strongly established trade relations in their currency (due to manufacturing) as well as their carefully laid out financial obligations (AKA debt traps) throughout the world - also in their currency.
(3) Believe it or not, everything points to AI becoming a gargantuan contributor to economies a decade down the line. The US, followed by China are way ahead of any competition here. And they will reap much of the benefits. India has barely begun it's AI journey while they have a decade (maybe more) of headstart under their belt.
(4) There’s a ton of other geopolitical, military and resources based factors but those are smaller ones compared to the above IMO.
@AITookMyJob Your point about de-dollarization is incorrect. Many countries use dollar not because they like US but because US is the country that can offer "Demand" for their products and can run large current account deficits (https://en.wikipedia.org/wiki/Current_account_(balance_of_payments). Apart from sanctioned countries, all these countries trade in USD as it's in their best interests to do so. China for economic and cultural reasons, cannot run a deficit (let alone a large deficit like US) and can only offer "Supply". Unless Xi Jingping suddenly changed decided to demolish their industries and becomes a large importer overnight, de-dollarization is not happening.
@3xPlusOne you should research more on debasement of us dollar and their debt. Read how hyperinflation happen. Somehow they have tightly held the system for now. They are just a mistake away from a crisis bigger than 2008
This is such a great great read!
Talking solely about China, the economy is very closed and guarded. We don't have exact numbers of the quantum of Chinese businesses, and eventually military funding.
Though US, could go messing up if their government continues depleting resources like this. Insane inflation will break the bones.
Imagine what would China be like if their economy wasn't closed off to the rest of the world due to sanctions and restrictions. I think they would've already beaten the US.
I agree that the US is living life dangerously at the moment :P But I also think they have some headway to recover their lead if things do go wrong.
China would have gone downhill, if they had. Too many cooks. Some friends have been to Beijing and Shanghai say the infrastructure is beyond what they have seen in any country.
It's a very superficial take. First, China's economy is not manufacturing-led, but real estate as RE makes up about 30% of their GDP. Not to mention that Chinese government doesn't use GDP as a proxy for economic development as other countries do, but instead sets annual GDP growth targets. Each province try its best to reach that target using infrastructure spending, which is why many economists like Michael Pettis consider China's GDP figures as a system input, rather than outputs. If you go by the night-time satellite data, many reports suggest that China's GDP might be 60% of its claimed figures and India might already be 1/2 of Chinese GDP.
Further, everything China does can be explained by "Overcapacity" - a key factor that explains why their products are quite cheap. CCP in China builds/manufactures stuff just for the sake of achieving the GDP. Their infrastructure, while very shiny, is mostly made of very poor quality. As the saying goes, "Why build it once, if you can demolish and build it multiple times". This phenomenon is not just limited to infrastructure. Imagine you are a manufacturer in a normal country, and you manufacture and sell a product (say 'wrench'). The amount you manufacture is highly dependent on the demand as inventory is costly and thus determines whether you increase or decrease the production. But in China, the State-Owned corporations get large amounts of subsidies and virtually unlimited funds. Based on the target growth figures set by CCP, the company simply keeps manufacturing the product regardless of demand as it contributes to the GDP. These companies then find a way to sell their products overseas, even if it's at a loss. This is the key reason why countries like India have anti-dumping laws.
Second, your point " Our population TFR fell below standard replacement rate in 2023. This means we will not be able to follow the same economic growth trajectory required to reach developed status before population stagnation or declination. This is not a death knell but definitely very VERY bad news" is completely wrong. The growth of an economy is determined by the dependency ratio (dependents / total workforce), not TFR. The dependency ratio can be high if there are too many kids or elderly. Now due to the declining birth rate, India's dependency ratio is reaching a goldilock zone where we typically witness demographic dividends.
First of all, I feel the need to clarify that I love India (my Bharat) and would give an arm and a leg for it. My thought comes from a place of deep concern and not supercial analysis. Every nationalist should start contemplating and having constructive discussions on how to enhance our nation and this is one of them.
Secondly, dependency ratio is an unproven and unreliable way to measure and predict the chances of the long term growth of an economy. Your claim about TFR being useless is not correct as we have plently of examples in South-east Asia itself of countries that have reaped the benefits of a good TFR. Here's a paper by the IMF that suggests why we should enable career women to become mothers as a way to tackle low fertility rate: https://www.imf.org/en/Publications/fandd/issues/Series/Analytical-Series/new-economics-of-fertility-doepke-hannusch-kindermann-tertilt
who cares, as long as we build new hindu temples regularly
Believe it or not, they contribute a lot to our GDP (2.5% or INR 3.2 lakh crores last I checked). These figures are by NSSO - the same org which released unemployment figures that made us question the government on what tf it has been doing. If you have any false beliefs that temples are not contributing massively to our economy, then you need to have an open mind and research more, my friend.
i meant that only, i already know the numbers
The US is in its late stage capitalist phase, a ship that's going to sink for the next 50 years. If you're a young person there it doesn't make sense to work as hard as your Grandpa the reward on average isn't as great.
India on the ...
I'm tired of this bullcrap. India will not keep growing if the US goes under. And all that growth shit is exaggerated...
Don't entirely agree- In the early 1980s, China and India had comparable GDP levels, both being predominantly agrarian economies with similar per capita incomes.
However, China's GDP grew exponentially over the following decades du...
