- Jan 2011
How is it more expensive to inport from India (if you are talking about labor costs) when India GDP/capita is only one fourth that of China ?From a perspective of market economy the problem related with outsourcing is that we outsource production to countries where there is no democracy. Why have we to outsource? Because here workers cost "too much" for simple productions. And why do they cost "too much"? Democracy ... they vote and their votes count.
In China the vote of the citizen doesn't count. So that Chinese politicians will simply govern the cost of the workers without a great interest in their wishes and desires about their own future.
The matter is different in India. I work for an Italian corporation which imports from India and from China as well: it's different. It's more expensive now to import from India than from China, because India is a developing Republic. I can imagine that in a not far future Indian corporations will import from China and Vietnam ...
In other words, an other problem for an eventual "global village" is that in a large part of the planet the market is not free. A Chinese worker, according to market rules, should gain really more money than what he/she gains in reality. But in China market rules are "politically managed" ... so that they are no more market rules ...