6 ms·
What's the next China then?
by iamcurious 5y ago
What's the next China then?
- r4vik 5y agoVietnam and Bangladesh
- baybal2 5y agoRavik, what do you think of Bangladesh vs. India business-wise?
- Ajay-p 5y agoI think labor will move to wherever it is cheapest. If China continues with economic irregularities, then Vietnam, Bangladesh, and other SE Asian nations may see enormous investment. What IF manufacturing pivoted outside of China? What would that do to the global balance of power?
- baybal2 5y agoThere are more factors to it than just cost of labour. Skilled assembly line workforce now comes at CNY10000-CNY15000 per month, more than the labour cost in cheaper US states, not to say that employers in USA pay close to nothing besides the salary itself (social security, pension fund, other welfare payments are minimal) Yet, nobody runs to open factories in USA. Some Chinese companies tried, and everybody seen how it went. In short: biggest manufacturing MNCs want nothing, but very skilled, educated, and young workforce coming at near no cost, and they bet everything on an all in investment in the country where have it. Samsung chose Vietnam. Now it is 1/3 of Vietnam's GDP.
- LurkingPenguin 5y agoVietnam will continue to see investment and has a bright future, but when thinking about China, it's a mistake to place too much emphasis on labor cost. Yes, the cost of labor is important, but it's not the only factor. Just a few examples of why China will be tough to dethrone: - China has a much larger pool of labor. It has literally hundreds of millions of potential migrants who can move from rural areas to urban areas to work in factories. This is multiples of Vietnam's entire population. - Vietnam is not yet anywhere near competitive with China in terms of skilled labor. - It was comparatively easy for China to develop the Pearl River Delta, which was once primarily agricultural, and turn it into one of the world's most powerful industrial regions because it can produce food in other parts of the country. Vietnam, which is much smaller, doesn't have that luxury with the Mekong Delta. So there's a land limitation in Vietnam. - The supply chains in China are far more robust and often highly integrated. For example, it's common to find factories located in super close proximity to the suppliers of the raw inputs they need. Sometimes the manufacturers are vertically integrated or have overlapping ownership with suppliers. - Although Vietnam has invested heavily in improving its infrastructure, China is still many years ahead in terms of roads, rail, deep water ports, etc. - Foreign companies that manufacture in China have also invested in Chinese manufacturing because it helps them open the door to China's domestic consumer market. The Vietnamese domestic consumer market is much much smaller.
- baybal2 5y ago> - China has a much larger pool of labor. It has literally hundreds of millions of potential migrants who can move from rural areas to urban areas to work in factories. This is multiples of Vietnam's entire population. Believe me, you don't want to hire the people left there in villages, even if they are young, and moderately educated. But in its majority, the labour that still drips from inland China is of lower quality kind. Anguished, tired, middle-aged men who didn't manage to move to the coastal cities during the heydays. > - It was comparatively easy for China to develop the Pearl River Delta, which was once primarily agricultural, and turn it into one of the world's most powerful industrial regions because it can produce food in other parts of the country. Vietnam, which is much smaller, doesn't have that luxury with the Mekong Delta. So there's a land limitation in Vietnam. Vietnam makes quite a lot of food, more than China by acreage by far. China is surprisingly agriculturally unproductive country. Take a look on Bangladesh, it has turned a food exporter, despite the truly microscopic size of arable land.
- LurkingPenguin 5y ago> Believe me, you don't want to hire the people left there in villages, even if they are young, and moderately educated. But in its majority, the labour that still drips from inland China is of lower quality kind. To knock China off, a country needs quantity, not quality. But even then, once again, Vietnam doesn't have an advantage here. Skilled labor is still very much in short supply in Vietnam. > Vietnam makes quite a lot of food, more than China by acreage by far. China is surprisingly agriculturally unproductive country. But that's the point. Vietnam is agriculturally rich and farming is part of the fabric of the Vietnamese culture. The country will not give the Mekong Delta to industry in anywhere near the same way China was able to sacrifice large swaths of historically agricultural land to industry. See again the Pearl River Delta. I'd personally love to see China replaced but post-COVID, spend some time in Vietnam or Bangladesh and it won't take you long to see that these countries are nowhere near close to mounting a serious challenge. Like I said, Vietnam has a very bright future and will gain, but it's not going to supplant China.
- baybal2 5y ago
- jhallenworld 5y agoFor Vietnam there is the risk of the authoritarian single party rule. It works as long as the decisions are wise, but nothing can be done if they are not. I kind of think this is what's happening in China now.
- p_j_w 5y ago>It works as long as the decisions are wise, but nothing can be done if they are not. Given how things are going here in the states, I'm not sure this is a problem limited to single party states.
- nradov 5y agoIf sea level rise predictions are accurate then much of Bangladesh is going to have frequent flooding problems. Can they engineer their way around the problem while still growing the rest of the economy?
- rocgf 5y agoMaybe India?
- baybal2 5y agoSaying India... Have anybody here ever tried not operating, but just registering a company in India? If so, tell people here how many months it took... The biggest exhibit of what's wrong with India, is to compare it to Bangladesh. Despite stating of with pretty much nothing in 1971, 2 decades surviving off humanitarian aid, and effectively 2 more decades of civil war, BD has now higher GDP per capita than India, better projections for coming years, and beating India on many, many more economic stats. And Bangladesh is by no means an example of good governance, or brilliant leadership.
- logicchains 5y ago> Saying India... Have anybody here ever tried not operating, but just registering a company in India? If so, tell people here how many months it took... Is it even harder than registering a company in China?
- baybal2 5y agoIt is
- mooreds 5y agoMexico is my vote. Great demographics, great access to the USA market.
- jhallenworld 5y agoI can attest that the people there are very hard working, I think most US citizens have no idea. At least this is true for people who are lucky enough to end up as professionals at the many factories that are there. Of course there are still many poor. One interesting theory I heard about the entire Latin world (explaining why it tends to be poor) is that the old Spanish empire was deliberately modeled to be an extension of aristocratic Roman empire. The problem that this causes is too much power in the hands of aristocrats, with not enough space left for risk-taking entrepreneurs. To the degree that this is true (I'm not sure..), longstanding contact with the US may moderate it in Mexico in particular. Here is a video about it: https://www.youtube.com/watch?v=efz4Aket2ao https://www.youtube.com/watch?v=efz4Aket2ao
- lotsofpulp 5y agoThat is impossible to believe considering you can go to almost every corner of the US and see Mexicans and other people of Hispanic or Latin American origin working in hard, manual labor roles.
- beerandt 5y agoThere's something to that, in that even among successful Mexican immigrants, there seems to be a (relative) lack of leveraging that success into establishing businesses, or other investments that require long-term commitment. Whether it's because of proximity, that so many come without family and/or plan on eventually returning home, or the related effect of so much of earnings getting sent back to Mexico every month, but there is definitely a cultural difference of some sort at play.
- keyboardCowBoy 5y agoMaybe they are hard working as they have no choice. Majority of Mexicans work odd jobs. The auto factories there have huge training centers because of extremely high turn over.
- jillesvangurp 5y agoIn terms of population growth, India and Nigeria are currently predicted to have the worlds largest population by the end of this century. Both China and India would shrink in population. China by quite a lot. https://www.weforum.org/agenda/2020/09/the-world-population-in-2100-by-country/ https://www.weforum.org/agenda/2020/09/the-world-population-...
- jhallenworld 5y agoAlso Kenya: it's all about Lagos vs. Nairobi.
- MangoCoffee 5y agoIndia: its huge young population however India needs a govrt like China to control and plan everything. India's govrt is its own worst problem.