Getting Off The Bottom Rung In India And China

Here is one of those snapshot statistics that throws into sharp relief an entire economy, or two in this case. It comes via journalist Rob Gifford, writing about Hefei in Prospect magazine.

There is one crucial difference between China and India, and a perfect example of it is coated in black tarmac and runs east and west through Hefei. China is a brutal place to live if you are on the bottom rung, but there is an exit. And, just as important, there is a real possibility of a job at the other end. India’s 1.1bn population is rapidly catching up with China’s 1.3bn. But India has only about 10m manufacturing jobs, compared with about 150m in China. So there are simply more opportunities in China to improve your life.

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5 Comments

Filed under Economy, Politics & Society

5 responses to “Getting Off The Bottom Rung In India And China

  1. Indiabystander

    Buddy, why only look at manufacturing. also, my friend, manufacturing brings pollution.
    Thank you.

  2. I was just highlighting the contrast in the job opportunities in the two countries for those wanting to ascend the economic ladder from the bottom. Nothing more. Nothing less. And I agree that tackling the environmental consequences of industrialization is one of the most important tasks facing any developing economy. — CB

  3. Indiabystander

    Hello,
    I do acknowledge that China has more manufacturing jobs than India, which translates into more opportunities for the poor to climb up the ladder.
    What I feel the most discomfort about, is that this is being caused by the under valued Yuan. Thus the Chinese economy isn’t a market economy. Manufacturing is being boosted artificially.
    Should India follow suit?
    I don’t think so. By letting industries adjust to market forces is the best way to allow long term growth and maturity.
    Another factor boosting artificiality in the manufacturing industry in China is the granting of loans by state banks in an inefficient manner, largely due to Communist influence. This cannot be healthy in the long run.
    India has lots of problems to solve before it can ramp up manufacturing. But at the same time, its willingness to obey market forces, especially in terms of exchange rate, will make its manufacturing industries better adapted to competition from around the world, in the long run. Lets face the fact, most of the world is under-developed. Sooner or later, everyone is going to catch up. When manufacturing (and other industries) start spiraling around the world, and assuming that the Yuan will eventually be free-floating by this time, Chinese manufacturing industries will face a tough time having to adjust to a rising Yuan (and environmental pressure) at the wrong time (I presume when China is at its peak, or just before that). This will cause imbalances in the Chinese labour market.
    While having said this, the Indian market will continue to grow without having to worry about artificial injection into the manufacturing (and other) industries into being global competitors.
    The power lies in the market and its free forces.

  4. You are right about the competitiveness of China’s manufacturing industry. One reason that Beijing is being so dilatory about letting the yuan rise is that it would be devastating for many domestic manufacturers, especially those away from the East coast.

    Also, unlike Japan three decades ago, which made export goods cheaper by taking labour out of manufacturing, China has done so by putting labour in. That is unsustainable if China is to move up the development ladder.

  5. Pingback: China versus India

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