Sunday, May 16, 2010

A discussion on Chinese economy on AZ Research FB

Sujay Misra : India has totally 105000 hotel rooms while Shanghai alone has 135000. Are we competing with China or Shanghai?
Anubhav Rawat : We are competing with Shanghai, as all politicians & corporations across India only mention that by 20XX We will be like Shanghai.We are competing with Shanghai, as all politicians & corporations across India only mention that by 20XX We will be like Shanghai.
AZ Research : We are not competing with China or Shanghai. We are only competing against ourselves. Keep in perspective that China is a state controlled economy and to sustain their growth the state can put in monies whereever they feel like. There are more than few ecoomists who believe that Chinese economy is a huge bubble with artificial Investment to Consumption ratios etc. There are no such concerns on Indian economy. Indian economy is for real. And hence more real and more robust.
Osty Lab : On a 400m race China is at the last 100m while we just started..but its good to aspire..we would tk an awful lot of time to catch up..democracy has its drawbacks too !
Beyond all this glitz n glamor of 'emerging powers', the growth is far from inclusive or distributed..this is ammunition enough for social unrest, if not already !
Sujay Misra : My worry is whether we will ever go past the 200 meter mark
Osty Lab : Democracy is like god's grinds surely..but SLOWLY !!!
AZ Research : Democracy has brought about the current developed world and also most of developing world. Lack of democracy brought about erstwhile USSR, North Korea, East Germany, Iran, Iraq etc ... In an economy like China, you can't even be sure of what constitutes GDP - when goods roll out of factories, they are counted as part of GDP, much before they even reach the tertiary sales point. there is enough speculated on how wasteful is infrastructure spends in China, done to just keep the economy pumped up. Don't forget that USSR was also perceived to be a developed country b4 the great collapse ! Till the bubble bursts !
Sujay Misra : Assumption being that China has not learnt from USSR :)
Anubhav Rawat : What will be the impact on the gobal economy if the china bubble bursts, will there be a rise in cost of goods (electronic) or fall?
Sujay Misra : If China collapses while cost of goods across the world will go up but overall it will have a posistive impact on India foremost and world economy as a whole because number of jobs etc will go up. This in turn will spur the failing european union and bring back the old world order of super powers. But China wont collapse.

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