globalization ending

tomar

Ad Honoris
Jan 2011
14,030
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 ...
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 ?
 

Dan Howard

Ad Honorem
Aug 2014
4,996
Australia
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 ?
Because it is impossible to deal with them. Every step of the process needs more oversight, more scrutiny, more control. Labour in India might be cheaper than China but the final result ends up costing more.

 

AlpinLuke

Forum Staff
Oct 2011
27,360
Italy, Lago Maggiore
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 ?
It's complicated to work with Indians and to import from that country can mean "surprises". Not to talk about documents and quality of the goods. To summarize I would say that Chinese producers do what you want with accuracy, Indians tend to interprete ... and it happens you receive something slightly different.

I could also mention radioactive containers blocked in the Italian port of arrival, but this problem is more related to the forwarding companies [I guess that some Indian forwarding companies can have some troubles to decontaminate the containers after transporting goods from the nuclear industry].

In a few words, we do prefer to work with Chinese producers.
 

tomar

Ad Honoris
Jan 2011
14,030
It's complicated to work with Indians and to import from that country can mean "surprises". Not to talk about documents and quality of the goods. To summarize I would say that Chinese producers do what you want with accuracy, Indians tend to interprete ... and it happens you receive something slightly different.

I could also mention radioactive containers blocked in the Italian port of arrival, but this problem is more related to the forwarding companies [I guess that some Indian forwarding companies can have some troubles to decontaminate the containers after transporting goods from the nuclear industry].

In a few words, we do prefer to work with Chinese producers.
OK but this is unrelated to "democracy" vs "dictatorship" issue
 

Larrey

Ad Honorem
Sep 2011
5,886
OK but this is unrelated to "democracy" vs "dictatorship" issue
If it wasn't then China wouldn't have become the manufacturing house of the western world for some decades. Regardless it is all highly relatable to a relative return to "politics", rather than a catch-all "market".

Globalization seems improbable to stuff back into the box. The modalities of it can been confronted and to much greater extent negotiated. The trick for the rich western countries is working out how to not beggar neither their own most vulnerable, nor developing countries who might relatively stand to improve their situation from aspects of it at the other end.

At stake is if a world economy possibly not too horribly unjust is possible – or maybe not. It will be crucial to what extent it all collapses into zero sum games, and attempts to run faster from the bears than at least one competitor – or not.
 

AlpinLuke

Forum Staff
Oct 2011
27,360
Italy, Lago Maggiore
OK but this is unrelated to "democracy" vs "dictatorship" issue
Right remark. Now, a democracy means voters to persuade to vote for your party. Economical arguments are the most easy "cards" to play and there's nothing better than allowing workers to gain more money. It's a correct policy [it sustains also the internal demand, so it helps economy]. So that workers in India are going to cost more and more. The very high inflation in the country is a clue of this process. It's not a negative process: higher salaries and wages can sustain the internal demand, helping economy, but inflation will make Indian products more and more expensive and so on ... some years ago India has left the list of the countries with advantage to export to EU [because now EU considers India more than an emergin economy].

China has got a "Socialist market economy", the purpose is the success of the People [the State, actually], not exactly the wealthness of the population [Chinese leaders haven't to persuade voters], so that they substantially manipulate the value of the money and they control the general level of prices [in China there is even deflation ...].
 

tomar

Ad Honoris
Jan 2011
14,030
China has got a "Socialist market economy", the purpose is the success of the People [the State, actually], not exactly the wealthness of the population [Chinese leaders haven't to persuade voters], so that they substantially manipulate the value of the money and they control the general level of prices [in China there is even deflation ...].
On this point I would disagree... Any regime has to take into account the wishes of its population (especially the wealth aspect) otherwise it is doomed longer term.... This was the main factor in the downfall of the USSR... China saw the writing on the wall which is why it embarked on a journey to massively improve its economy and the wealth of its population, putting aside many of its ideological principles
 

Larrey

Ad Honorem
Sep 2011
5,886
On this point I would disagree... Any regime has to take into account the wishes of its population (especially the wealth aspect) otherwise it is doomed longer term.... This was the main factor in the downfall of the USSR... China saw the writing on the wall which is why it embarked on a journey to massively improve its economy and the wealth of its population, putting aside many of its ideological principles
That is effectively a big part of the western assumptions about China – as and when an affluent Chinese middle class established itself, it will need and eventually demand new sets of guarantees, influence and eventually direct say in things,

Whether that will happen at all, and if so how, when, etc. is for now all conjecture. The Chinese government certainly insists that it has not just a handle on this, but even a better model of society to share with the world, QED. The CCP claiming something does not necessarily make it so otoh, much as the effects in China might be in the short term indistinguishable.

Everything is still in play. And change occurs regardless. Just trying to stand still requires huge effort.