Decoding of facts and figures is the responsibility work of economist and projecting the economic growth and decline cycle is the duty. Well today I am here to present a some capsule of the same. It time for corporate Asia to take frame its growth strategies but I find that the western economies are going to turn the coin on their side. China is facing the problem of old age which will rule its economy over the next decade.
Hence china would focus more on the middle aged income segment to get the consumption growth to drive the economy. China would focus less on export due to global slowdown but more due to currency valuation tricks being caught by the western economies. Per employee cost is set to increase in China over the coming years due to depreciating rupee and better working class of the economy. China was able to keep an active working class since after 1970 the next decade of manpower in china was active behind key developments. That same manpower is now old enough and one child policy of china has placed a brake on the young generation of china. I find that in coming days china would have higher prices for its end products and Business models are becoming more capital intensive, but improving productivity will be an ongoing challenge for china.
The same model is set for the rest of Asia which includes countries like India where employee cost is going to increase by many folds. The era of under valuation of the currency in the Asian economies is about to get closed in the coming decade. The phase of manufacturing would also change where robotic based manufacturing system would drive the manpower cost which would lead to an extensive unemployment in the Asian economies. The currency valuation would replace the cheap manpower offshore based business models to wind up. India would remain one of the most attractive spot for investments and all type of economic exploitation since young population, eradicating middle class and wide growth in consumption aspiration is the prime growth drivers for the economy. But the high level of scams and uncertain regulatory restriction US economy would find a substantial change over in its economy where the young generation would save more and spend reasonably. More over country like India have been in the radar of international political threat which is still ruling the current economic conditions. For india it would be more of political stability which would keep the investment climate to grow but that distant dreams remains to be quite uncertain in 2014.
The recession of 2008 has made it well clear that if western economies have to grow then flow capital have to shift from emerging economies to developed economies. Moreover a country like India ruled by scams and red tape bindings makes it less viable for investments. Countries which would have stringent and flexible political mechanism would be able to attract more capital. The picture of young generation and young earning class of people and increasing number of wealthy Indian’s are good to hear in good times but today as on 25thAugust 2013 its well clear that we are dependent on foreign capital. Western economies over the decade would come up with extensive resources which would drive their economy to grow. I find that globalization is going to come to an end since the same has affected the western economies. Developed economies would focus more on export and less on import and this is the key area where shift of the capital is going to happen. Productivity challenge would rule the Asian economies where as western economies would find expert level of productivity based game changers.
0 Comments:
Post a Comment