Tag: manufacturing

The Many Ironies of India-China Economic Relations

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Jabin T. Jacob, PhD, Fellow, Institute of Chinese Studies

Pickpockets are not uncommon in crowded places in India. Victims are generally realists and tend to resign themselves to their misfortune quickly often not even bothering to go to the police. Not so, however, actor-turned-politician Manoj Tiwari, head of the Delhi unit of India’s ruling party, the Bharatiya Janata Party. When he lost his iPhone Seven Plus at a demonstration, he promptly complained at the local police station. Politicians in India are often able to get the police to expend extra effort on their behalf, so Tiwari’s response was not really surprising.

What was surprising was the fact that the politician had lost his phone at a protest against Chinese-made goods organized by an affiliate of the BJP’s parent organization, the right-wing hyper-nationalist Rashtriya Swayamsevak Sangh. And as American as Steve Jobs might have been, the iPhone is the quintessential made-in-China product.

Such ironies are a dime a dozen in the India-China relationship. Continue reading “The Many Ironies of India-China Economic Relations” →

India’s Uncertain Demographic Dividend

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Jayan Jose Thomas, PhD, Associate Professor of Economics, Indian Institute of Technology Delhi and Member, Planning Board, State Government of Kerala

A version of this article was originally published in Chinese as ‘印度不确定的人口红利’ [Yindu bu queding de renkou hongli], Diyi Caijing, 10 July 2017. This is part of a series by Indian scholars in China’s top business affairs news portal facilitated by the ICS. The English version follows below the Chinese text.

普遍的观点认为，印度将受益于所谓的“人口红利”。据世界银行估计，2010年至2030年间，印度15岁至59岁人口将增加至2亿多人。与此同时，包括中国在内的世界大部分发达地区的适龄劳动人口预计将会下降。也就是说，未来几年，印度会为全球劳动力供给的大幅增长贡献力量。

然而，实现人口红利对印度来说并不容易。首先，获得诺贝尔经济学奖的阿马蒂亚·森(Amartya Sen)指出，在卫生和教育领域，印度面临严峻挑战。2010年，印度的婴儿死亡率是每千名47例，而在中国，这个比例已减少到每千名13例。

对印度政策制定者来说的另一个重大挑战，是为新进入劳动力市场的印度人创造就业机会。事实上，大部分年轻劳动力的增长将来自印度最贫穷的地区，主要包括北方邦和比哈尔邦在内的北部和东部地区。 Continue reading “India’s Uncertain Demographic Dividend” →

Artificial Intelligence and China’s Future

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Shruthi Anup Kumar, Research Intern, ICS

The field of artificial intelligence or AI encompasses a number of possibilities. Ranging from autonomous driving systems and language interpretation to facial recognition and military weapons, AI comprises not only the development of a robot that can move, think and talk like a human being but also includes smart programmes that are built to overcome our shortcomings and make the job easier for a human being.

In 2015, China’s central government launched the ‘Made in China 2025’ policy,[1] whereby the shift in focus from mass producing factory goods to developing high tech manufactured products by the year 2025 was announced. The effect of this policy was especially felt in the AI sector which is expected to grow from an industry of 23.9 billion Yuan (as of 2016) to 38 billion Yuan by the year 2018.[2] Continue reading “Artificial Intelligence and China’s Future” →

China’s Technological Success in Manufacturing

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Amitava Banik, BE (E&C), PGDM (Insurance Business)

China has for some time now been holding a position of technological significance in the world. It is a great success story for a country that is still counted among the world’s developing nations. Memories of the time it had been associated with inferior quality products have all but vanished. China has not only been extremely successful in making its products the “new normal” all over the world, but with its investments in cutting edge technologies, infrastructure and skilled manpower, it has started to edge into the hi-tech zone.

It is generally accepted that countries develop in successive stages from an agricultural economy to industrial manufacturing and then to a service-based economy. All major world economies have traversed this path. The transformation in India on the contrary, has been from the agrarian economy to a service economy, virtually jumping over the manufacturing stage. One of the primary reasons put forward by economists for this bypassing of the manufacturing stage in India, is the lack of progress of primary education in the country. Continue reading “China’s Technological Success in Manufacturing” →

Pressing Pause: India’s Absence at China’s Belt and Road Forum

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Shyam Saran, Member, ICS Governing Council and former Indian Foreign Secretary and Prime Minister’s Special Envoy

The successful conclusion of the Belt and Road Forum (BARF) in Beijing, which India chose to stay away from, has led to a chorus of voices warning that in doing so, India has isolated itself both regionally and globally.

With the exception of Bhutan, all the South Asian neighbours of India participated, as did countries India regards as its partners in resisting the Chinese dominance of Asia; these include the US, Japan, Australia and Vietnam. Japan and Vietnam are also countries of South East Asia, which, like India, have territorial disputes with China, but they did not consider those disputes reason enough to stay away. It may also be argued that India itself has not let its territorial disputes with China stand in the way of cooperating with it on matters of mutual interest such as the Asian Infrastructure Investment Bank (AIIB) or the BRICS Development Bank (DB).

India’s membership of the Shanghai Cooperation Organisation (SCO) will also present opportunities for regional cooperation with China and other member countries. These opportunities constituted a rationale for seeking membership in the organisation. So, did India make a wrong call in staying away from the BARF? Continue reading “Pressing Pause: India’s Absence at China’s Belt and Road Forum” →

GST and Doing Business in India

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Sacchidananda Mukherjee, PhD, Associate Professor, National Institute of Public Finance and Policy, New Delhi

A version of this article was originally published in Chinese as ‘商品和服务税对在印经商的影响’ [Shangpin he fuwu shui (GST) dui Yin jingshang de yingxiang], Diyi Caijing, 15 May 2015. This is part of a series by Indian scholars in China’s top business affairs news portal facilitated by the ICS. The English version follows below the Chinese text.

在经历漫长的等待之后，印度终将于2017年7月1日起推出商品和服务税（GST)，实现统一税制。在四项法案（Central GST、Integrated GST、Union Territory GST、GST Compensation to States）通过印度两院批准后，将会形成GST征税行政框架以及执行规则。

预计GST改革委员会将于2017年5月为各商品指定税率。不同社会经济阶层所需承担的不同税负在很大程度上取决于细致划分下不同税率的商品与服务。目前，委员会已确定了四层税率结构（5％、12％、18％和28％），预计委员会还将公布一份简短的，包含了部分基础商品及服务的豁免清单。而对于低质货物（如烟草制品、汽水）及对环境有害的物质（如煤炭），除了征收最高税率外，还有征收额外的GST补偿税。由补偿税组成的税收收入将用于补偿邦政府在新税制实施头5年面临的税收损失。此外，委员会还明确了针对不同类别商品设定的相应的最高GST补偿税率，如对槟榔、豪车分别征收135%、15%的税，对每吨煤征收400卢比。不过具体到各不同商品的GST补偿税尚未明确。因进项税可抵免GST补偿税，因此不会产生针对补偿税的阶梯税率。 Continue reading “GST and Doing Business in India” →

Economic Ties with China: India Needs to Look Beyond Politics

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Alka Acharya, ICS Honorary Fellow and Professor, Centre for East Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi

There appears to be a world of difference between the images presented by India-China economic and commercial ties on the one hand and the politico-strategic on the other. Interactions and exchanges with representatives from both these domains are markedly different in tone and tenor—the former focus on the opportunities, openings, benefits and profits while the latter dwell more on the dangers, threats, challenges and disputes.

Prima facie, they appear to be working at different levels, according to their own—somewhat different—logic and rationale, and it does not look like they will converge any time soon in a more composite picture of this most critical of relationships in the world today. The political understanding at the highest level, which is committed to building a strategic and cooperative—and now more promisingly ‘developmental’—partnership, struggles with deep suspicion that runs through practically our entire strategic discourse. On the other hand, economic engagements have become the most dynamic and transformative aspects of the India-China relationship today. But this has to contend with the structural mismatch between the manufacturing strengths and industrial capacity of the two economies—and therefore, unsurprisingly, perceived by and large as a situation that works only to China’s advantage. The controversial and contentious political issues and the angry exchanges understandably garner greater attention.

Bigger Picture

And yet we must ask ourselves as to whether that is all there is to the overall picture. Continue reading “Economic Ties with China: India Needs to Look Beyond Politics” →

Why Economic Engagement with China Matters

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Ravi Bhoothalingam, Honorary Fellow, ICS

In the aftermath of the Dalai Lama’s visit to Arunachal Pradesh, India-China bilateral relations have plumbed new depths. China accuses India of using the Dalai Lama to provoke anti- Chinese sentiment, and says that diplomatic relations are “seriously damaged”. But His Holiness is a popular and revered guest in India, and so the Indian government’s resolute defence of his right to travel anywhere in the country remains fully in harmony with popular sentiment. Still, we should expect a climate of “cold peace” between the two countries for some time to come, with bilateral political issues remaining unresolved. However, a Sinophobic public climate can damage our own public interest, and this the government should work to avoid. Because China matters to India — if not politically — certainly in the realm of economic development. And it matters in four quite specific ways. Continue reading “Why Economic Engagement with China Matters” →

Why China Should Support “Make in India”

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Ravi Bhoothalingam, Honorary Fellow, ICS

A version of this article was originally published in Chinese as ‘中国为何应支持“印度制造”’ (Zhongguo weihe ying zhichi “Yindu zhizao”), 第一财经 (Yicai), 4 April 2017. This is part of a series by Indian scholars in China’s top business affairs news portal facilitated by the ICS. The Chinese version follows below the English text.

“Make in India”—a signature campaign of Indian Prime Minister Narendra Modi– was launched in late 2014 with the objective of transforming India into a dynamic global manufacturing hub, and thus radically enhancing employment and the prosperity of the Indian people. Just a few months later came an announcement from China’s State Council of “Made in China 2025”—a set of eight policy measures to re-orient the Chinese manufacturing sector in line with the country’s economic structural adjustment program. So, are “Make in India” and “Made in China” competitive programmes which coud drive another wedge between these two nations?

To answer this question, we need to understand the nature of both “Make in India” and “Made in China” more closely. Continue reading “Why China Should Support “Make in India”” →

Structural Transformation in the Chinese Economy: From Manufacturing to Services

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Zhang Bin, PhD, Senior Fellow, China Finance 40 Forum & Chinese Academy of Social Sciences, Beijing

A version of this article was originally published in the Business Standard as ‘The way forward for the Chinese economy’, 18 March 2017. This is part of a series by Chinese economists facilitated by the ICS.

As part of the cycle of economic development, all advanced economies have undergone industrialization and post-industrialization. Industrialization involved the manufacturing sector’s focus on increasing GDP, employment rate and consumption of manufactured products. For China, the post-industrialization phase implies economic activities will be concentrate in the service industry.

Based on measures of income level, the rate of growth of the manufacturing sector, employment rate and the consumption of manufactured products, China has passed the peak of industrialization. If global experience is a guide, the peak of industrialization happens when per capita GDP ranges between US$8,000 and US$10,000 (PPP based on 1990 value). After reaching the peak of US$10,000, the proportion of the industrial sector indicators continues to decline. By this yardstick, China has passed the peak of industrialization. Continue reading “Structural Transformation in the Chinese Economy: From Manufacturing to Services” →