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Benoist_Shanghai
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Mar 20, 2004 - 10:15 PM |
 
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| Post subject: "China is bound to disappoint" |
This article comes from the Economist and is one of a series on China.
Quite interesting. Read the same kind of comments last week from Cepii, a French based research centre on prospective and international economics, expressing some worry about industrial overcapacities due to the 30% boost (this year) in FDI which have been the core element of the last ten years growth, when combined to weak banking system whereas the country faces major challenges in terms of employment, rural depopulation, gap in economic development and momentum, and cant be take for granted that foreign groups will continue to reinvest their profit in China like they have been doing until now.
http://www.economist.com/displaystory.cfm?story_id=2495113
SURVEY: BUSINESS IN CHINA
Behind the mask
Mar 18th 2004
From The Economist print edition
ImagineChina
Hailed as the business opportunity of the century, China is bound to disappoint. Sameena Ahmad (interviewed here) examines the mismatch between excitable perception and sober reality
THE whole world's gaze is fixed on China—not just because the country is vast and growing rapidly, but because it profoundly affects the fortunes of companies everywhere. Around the globe, shelves are stacked with the low-cost goods churned out by “the world's workshop”. Chinese-based manufacturers suck in imports and dictate global prices of everything from steel to microchips. For foreign companies, a huge market beckons as China liberalises its relations with the rest of the world, having acceded to the World Trade Organisation in 2001.
China's progress since it first opened to foreign investment and reform in 1978 has been dazzling. Over the past 25 years, its real gross domestic product has expanded at an average of 9% a year. Growth in foreign trade has averaged 15% annually since 1978; China's trade surplus with America is now twice the size of Japan's. And every week, more than $1 billion of foreign direct investment flows into the country. All this testifies to the global integration of China's economy, now the sixth-largest in the world with a GDP of $1.4 trillion.
This rapid growth has ensured political stability. Whereas socialist regimes around the world have crumbled, China's Communist Party survived the 1989 Tiananmen Square uprising, the 1997 Asian crisis and last year's SARS virus without making concessions to democracy. The present leadership is well-educated, capable and pragmatic.
Internationally, China has become respectable, more a partner than a threat. The continuing debate about the “undervalued” yuan says more about partisan American politics than about Chinese mercantilism. Domestically, the government is well aware that its political acceptance derives solely from rapid economic growth, and will do whatever is necessary to meet its internal benchmark, an annual rise of 7%. China's leaders still call themselves communists, but they have become capitalists in practice. If they have a guiding philosophy, it owes nothing to Mao or Marx, but is best summed up by Deng Xiaoping's famous dictum: “It doesn't matter whether the cat is black or white, as long as it catches the mouse.”
The combination of growth, stability and potential has set off a tidal wave of foreign enthusiasm for China. Businessmen return from pilgrimages to Shanghai and Beijing convinced that this is China's century. Robert Bestani, head of the private-sector arm of the Asian Development Bank, calls the phenomenon “future shock”—change so rapid that it seems like a vision of the future. Dietmar Nissen, East Asia president of BASF, a huge chemical company, says that “the speed and scale of growth in China over the past 12 years is a miracle. It is a miracle that China is developing in such an orderly fashion.” Messianic terms are de rigueur when discussing the country's 1.3 billion consumers, its vast pool of low-cost workers and its need for every imaginable product and service. Goldman Sachs, an investment bank, predicts that by 2040 China will overtake America as the world's biggest economy.
This survey will cut through some of the hyperbole currently enveloping China. Progress there is as real as it is dramatic, but the country is still in transition from one political and economic system to another. The constraints imposed by the communist leaders (not least on themselves) have produced “a darker reality” behind the impressive statistics and soaring skylines, in the words of Orville Schell, a professor at Berkeley who knows the country well.
Look on the dark side
China needs 12m-15m new jobs every year just to keep pace with its population growth. It has to provide opportunities for the 800m people living in rural areas who have been left behind by the current boom, and a third of whom are under- or unemployed. It also has to deal with the 100m-150m migrant workers in the cities who have no job security, no long-term housing and no health care. And it needs a functioning pension system. No wonder the government is concerned, above all, with growth and job creation.
Currently there are worries that the economy is overheating. Bubbles are beginning to form in property, steel and cars, and power generation is running up against capacity constraints. China's real problem, however, is not inflation but overinvestment. In its quest for growth, the government has directed its state-owned banks to open the taps. Easy credit is producing massive overcapacity, leading to deflation, more bad debts and fewer new jobs. Already, nine-tenths of manufactured goods are in oversupply, yet investment in fixed assets last year grew by 30% and contributed 47% of GDP. Three-quarters of China's growth comes from capital accumulation, according to Paul Heytens and Harm Zebregs of the IMF, yet total factor productivity—a measure of overall economic efficiency—rose by only 2% a year in 1995-99.
Even for a developing economy, China's level of investment is unusually high. South Korea in its period of rapid growth in the 1970s and 80s had investment levels closer to 25% of GDP. But the biggest concern is that China's growth is staggeringly wasteful. Whereas in the 1980s and 90s it took $2-3 of new investment to produce $1 of additional growth, now it needs more than $4. Even India, often compared unfavourably with China, is now more efficient on that measure (see chart 1).
Only a very high domestic savings rate—around 40% of household income—and the uncontrolled exploitation of its natural resources make it possible for China to waste capital on this scale. But neither is sustainable. With little social welfare on offer from the state, the Chinese need to save to provide for themselves. And environmental degradation and noxious pollution are storing up costs for the future. All this means that China's growth will have to slow markedly unless its government wants to drown in debt—maybe not this year or next, but soon.
That is yet another risk for businesses already facing a host of challenges. China's developing capitalism is not solidly based on law, respect for property rights and free markets. It is unbalanced and potentially unstable. Multinational companies operating in China have often failed to produce an adequate return on their investment, or indeed a profit of any sort. That is partly their own fault, because they overestimated the market and underestimated the competition. With experience, more are getting it right. However, the business climate in China remains capricious and often corrupt.
Chinese firms contribute to that climate. State-owned enterprises are much more concerned to maintain patronage and employment than to generate profits, and even the best are not globally competitive. China's fledgling private businesses, by contrast, have shown astounding growth and produced the country's first crop of wealthy entrepreneurs. But they are still too small to offer an effective counterweight to the state sector.
It is in the financial sector that China's brand of “not wholly black, not fully white” capitalism works least well. The banks do not allocate capital rationally, and they are vulnerable to external shocks. Yet the potentially huge cost of reforming them will constrain the government's ability to finance economic growth. That will have implications for China's political stability, and for its attractiveness as a place in which to do business. |
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LeiFeng
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Mar 20, 2004 - 10:35 PM |
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This is not new news of those of us who are thinking long term about the future. How long do people "give" China? When will the crash occur? Personally, I taken as given that a crash, in some form, to some degree, will occur. |
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Benoist_Shanghai
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Mar 20, 2004 - 10:53 PM |
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Probably not completely new is the news, but more the fact that it is being more broadly and repetedly asserted while not till long ago, consistency and durability of China's economic development seemed to be considered as an untangible truth, at least in my eyes.
b. |
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LeiFeng
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Mar 20, 2004 - 11:25 PM |
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So, Benoist, you think China will continue growing at present levels indetifinitely? Or do I misunderstand? |
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okido
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Mar 20, 2004 - 11:29 PM |
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I was more surprised that this issue was not seriously regarded and researched earlier. When an economy relies so much on FDI for it's development, any so-called "boom" would be untangible.
"Goldman Sachs, an investment bank, predicts that by 2040 China will overtake America as the world's biggest economy. " Yeah, probably. And the world-class gap between the wealthy and the poor? |
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Benoist_Shanghai
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Mar 20, 2004 - 11:34 PM |
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errr, no, I probably messed up with commas and co. Let me reedit my previous post and put all part in the right order ! Better now ?! :
Probably not completely new is the news, but more the fact that it is being more broadly and repetedly asserted while I have the feeling that until not so long ago, consistency and durability of China's economic development seemed to be considered as an untangible truth that was not to be challenged.
b. |
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Henry_Chinaski
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Joined: Aug 16, 2003
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Mar 21, 2004 - 11:27 PM |
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I think the article ignores variables that should be considered for determining if a crash will occur or not.
Among them:
-The shift of value added activities in the value chain from the developed world to China. It is just starting.
-Huge educated workforce (in volume but not percentually) and the value they WILL add internally
-Huge potential for increase in private consumption to make up for future decline in FDI (oversupply when helps on this front).
-Privatization of banking system and new regulations due to WTO which are just around the corner
-Increase in productivity that will occur because of all of the above and added innovation as more transparent management styles from the West start to be more adopted.
So, in my humble opinion the article tries to forecast the future assuming the China plane is in auto-pilot. It's not.
Hard landing, perhaps, "crash", unlikely. Or maybe it's better not even to think about it...Biblic proportions disaster.
HC. |
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vaokey
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Mar 22, 2004 - 01:11 AM |
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In fact,some foreigns can not penetrate china because of the gap of cultrue,including famous foreign economists.China has her 5000-year history and cultrue of her own.China,s political and economic system can not be understanded by people who think in styles of other cultrues. |
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jane_ca
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Mar 22, 2004 - 02:25 AM |
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>while I have the feeling that until not so long ago, consistency and durability of China's economic development seemed to be considered as an untangible truth that was not to be challenged.
That's the problme when have you mind, ears closed. Such big news for everyone here!
A gypsie without crystall ball could have done better.:p |
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Benoist_Shanghai
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Mar 22, 2004 - 08:37 AM |
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Good, helps a lot. Thx jane_ca.
b. |
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LeiFeng
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Mar 22, 2004 - 10:50 AM |
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Firstly, the group of people who think that westerners cannot understand China because there is something uniquely Chinese about China that prohibits all normal rules of logic applying can... well, you know what they can do 
Secondly, Henry, some interesting ideas there but to counter some of them:
- China has huge competition when it comes to a shifting "value added" work here - c.f. India. Poor IPR protection does not help as much of the time "value add" equates to knowledge add. You can see Chinese government is resorting to forcefully move China up the value chain with misguided and possibly illegal legislation in the wireless telecom sector.
- China's educated work force is growing rapidly but this is a mixed blessing as the standard of education is low (higher education) and this depresses wages ultimately reducing domestic consumer expenditure (private consumption).
- Nobody has really gone into the details of the dire situation facing the Chinese banking system, but most of us here know that if all depositors went to bank branches and tried to withdraw their deposits, the consequence's on China's (liquid but insolvent) banking system would be dire. In my opinion, this is one of the scenarios that could lead to a real revolution, but anyhow...
- Increased efficiency from copying Western management practicies. Well, foreign firms have been in China for 20 years now and only best-of-the-breed companies are really getting the benefits of that knowledge transfer. Is it just a matter of time? Maybe. |
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Jeff-HMB-CA-USA
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Mar 22, 2004 - 11:03 AM |
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Just a quick follow on question:
Productivity is a huge driving factor in "fully developed" western economies, mainly because of high wages. How much does the lower average wage in China change the equation? Does the sheer plentitude of available manpower depress wages enough to remove much of the incentive for improving educational levels? Is it cheaper to just bring in a new brain or two periodically and make up for the rest in numbers, than to revamp the system? And, if productivity were greatly increased, how could China keep employment from getting even worse?
(I don't know the answers, just throwing some thoughts out). |
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Henry_Chinaski
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Mar 22, 2004 - 11:48 AM |
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A quick one for Jeff: China has what economists call a "flat labour curve". This means you have so much labour to be absorved that even by increasing the percentage of population employed wages will be kept the same. In developed countries labour curves are not flat: if you employ more people, wages in general will tend to go up, creating a disincentive to hiring more people.
I think the impact of this flat labour curve is much bigger in low value adding products and jobs. In more sophisticated jobs this law does not apply to its full extent, so, I believe an increase in productivity will not necessarily lead to more unemployment. In fact what is believed as the effect of increase in productivity is a proportional increase in investment due to less capital being tyed with unproductive activities.
I think to have a sharper discussion we need to segment the productivity increase per sector.
Anyway....back to draft a reply Leifengs post, brb.
Laters,
HC |
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blackdog
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Mar 22, 2004 - 12:17 PM |
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HC, is the implication of the Flat Labour curve mean that for the vast majority (particularly those involved in low value adding sectors) there will be no percepatable increase in wages even in the medium to long term(and all that follows in the general bucket of Standard of Living)?
If so will there then be an increasing disharmonic balance between the have's and have not's? Irrespective of China's ability to massage the masses, I believe that the social friction that will accummulate must force some form of change, although I have no idea what the change will be. Perhaps an extension of the One China two systems?
The economic arguements and economic results cannot be viewed in isolation, but must give some voice to the social consequences as well.
This is a tremendously complicated arguement (the whole discussion), so many variables I doubt that we will have a clear unarguable prediction. None the less, the considered thoughts of those of this forum make for interesting reading.
The simplistic notion that no foreign economist (or foreign anyone) can understand (or sensibly discuss) the economic, social, and political future of China, in particular the effect of its economic involvement with the rest of the world, seems... well just dumb.
What is under discussion is the effects of the interaction and who better to discuss than those working and living that interaction. |
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Henry_Chinaski
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Mar 22, 2004 - 12:24 PM |
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Good points Ben.
Let me try to cover them one by one.
-Outsourcing: the profile of outsourcing between China and India are very different. The industrial profile of the two countries is also very different. China is more attractive for manufacturing outsourcing while India is attractive for its services outsourcing. There is no competition here. India will do/is doing great in outsourcing such as IT, project management, financial analysis and the like. China will do great in design outsourcing. The overlap is smaller than we think.
Also, it has been proved that in many cases outsourcing to India was not successful: IT services from Japan is a great example. It simply did not work in India. However, IT services outsourcing from Japan to China is just starting, and so far so good. It might be the case in the future that other services will follow the same pattern to. So: there is room for improvement but we are headed in the right direction.
-Educated workforce: I disagree that the standard of education is low. There are very good examples of success in many engineering fields at least. Outsourcing engineering design from developed nations to China is happening at a very fast pace. For a standard engineering challenge there is no way 2 western engineers will deliver more punch than 30 Chinese engineers cracking the same problem. What happens is that in terms of INNOVATION China might not fare that well yet BUT in terms of doing the 95% of the hard laborious design tasks, there is hardly no way to compete with the VOLUME of Chinese brains. It's an asset. As for the wages: indeed there is a drop in wages BUT the private consumption will be much more impacted by a decrease in savings rates (today very high) than this tiny decrease in a very tiny part of the population. So, I think the decrease in wages is not crucial in the picture at all, but your point is totally right.
-Banking system: in fact ANY country in the world would go bankrupt if everybody chose to pull their money out at the same time. The central bank of a country normally issues a directive of the percentage of hard money that a bank must have a given point in time. This percentage is called the "required reserve ratio". If for whatever reason the government wants more money to be in circulation, it decreases the rrr. If it wants less lendable money around, it increases the rrr. Chinese Central Bank has in the last months INCREASED the rrr, making it harder for banks to lend money.
One of the main task of a Central Bank is to create CONFIDENCE enough so people will not go all at the same time in the bank to get their money. In ANY country of the world this would be disaster. In fact we have a good example of that in Argentina in 2002: everybody went to the bank at the same time to withdraw their money BEFORE the currency collapsed. Obviouslly the currency collapsed BECAUSE of that. No one had confidence in the system. The CCB is doing an outstanding job on this front to control the banking lending ratio and increase risk management so to assure money is lent properly. Without that, WTO sanitization will not be possible. This is the highest item in CCB's priorities for sure.
-Efficiency: I think successful Chinese companies proved that the way to move forward is not to COPY western management styles but to ADAPT it. I would be glad to recommend you an article in McKinsey Quarterly about Haier: they are one good example of the blend between western and eastern management styles and how innovation, modern management, financial responsibility can go hand-in-hand in China. We have very good examples of Chinese companies doing fine abroad and also multi-nationals that are doing great here as well. Some companies succeeded, some companies didn't: any investment has its risk.
Well, I don't have the local insight that you have by working with local companies, so, I might sound a bit cocky and a bit far away from the real world BUT from what I see, we definitely can feel a strong framework for stability being implemented in China. It will take time but it will come. It has a lot of risks, but they are manageable. Further, as the article points out, China's "present leadership is well-educated, capable and pragmatic." They are, and they are doing a GREAT job. Hard landing? Maybe. Crash? Definitely not.
Time to grab some food.
See you later.
HC. |
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jrtk
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Joined: Apr 30, 2003
Posts: 96
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Mar 22, 2004 - 12:25 PM |
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The Bush administration has recognized that the only viable way to undermine the hard-liners (PRC) and to help the Chinese people move toward a more prosperous, freer and peaceful future is to continue our policy of engagement. Congress must make sure that U.S. security is not compromised, but too often national security is used to justify purely protectionist motives--aimed more at saving U.S. jobs than U.S. lives.
It is time for the U.S. protectionist to make some concessions.The vast majority of product and material prices in China are now market-determined, and the non-state sector is the major force behind China's rapid economic growth.
Today's generation in China has reliazed that political dissent is not an option, so "business has become the ultimate expression of individuality."
Deepening and stabilizing commercial ties between the leader of the free world and the PRC will assist those who wish to build a freer and more open society.
China's future will be determined largely by how its people and the rest of the world deal with the major transitions facing that country today, according to James Sasser, former U.S.Ambassador to China.
"The ultimate success or failure of these transitions are very much
dependent upon policymakers on both sides of the Pacific," he said.
China's integration into the world community is another major
challenge facing that country, according to Sasser.
"A strong, stable, secure and prosperous Asia cannot happen without a
strong, stable, secure, prosperous and outward-looking China," he
said. Sasser added that China's willingness to engage with Taiwan and
its role in encouraging North Korea's engagement with the West show
China's interest in global leadership.
"It is no exaggeration that these events signal an end of the Cold War
in the Pacific," Sasser continued.
However, Sasser said, the success of China's new leadership and their
integration into the world community will be largely dependent upon
how they make the transition into the rule-based international
economy.
According to Sasser, China's transition from a planned economy to a
market economy is being accompanied by political liberalization.
"While the process is slow," Sasser said, "it is occurring, and China
is more free today than ever before."
Sasser said that although the U.S. role in the success or failure of
China's transition may be indirect, the United States can help to move
China in the right direction by adopting policies that increase
cooperation and hasten economic change. |
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LeiFeng
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Mar 22, 2004 - 03:55 PM |
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Henry, always a pleasure to have somebody as well read as yourself refute my points.
Regarding China's future, there are optimistics and there are pessimists. I think we are both optimists (as are many of those here of their own volition who have made a considered judgement).
Even the most evangelical of optimists (and, given the choices we have made, perhaps we even fit into this category), must be mindful of the risks and uncertainities the future holds. I must say that scenarios in which China's economic growth is either greater eroded (not to mention outright collapse for whatever causes) hold great fascination for me. If only so I can play Devil's advocate.
Your points about banking systems in general are valid, although I am sure you would not argue that the ratio of bad debts here is alarming high and despite progress in reform, debt financing sadly remains out of the reach of the companies who could use the capital most efficiency (small and medium private businesses).
Henry, I am curious on whether you see transnationals and multinationals moving manufacturing to locales where the labour costs are so high that China looks expensive (primarily SE Asia in my mind). It is my personal belief that China's primary advantage now is that it is enjoying (for China) a long period of political stability - something that is harder to say for other nations with low labour costs (I cannot back this up; this is my gut feeling).
There is certainly a lot of IT outsourcing between China and Japan at this moment, would be interestingly to understand why, given the relative inexperience of China-based ODCs. Perhaps because India's biggest advantage - cultural closenest to the west through excellent English skills and British colonial influence - is worth little out here. |
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Jeff-HMB-CA-USA
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Mar 22, 2004 - 04:25 PM |
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Good thread. Very educational.
How's China doing on making it attractive for foreign/international companies to set up shop in China? How secure are property rights, in terms of factory ownership (full or partial) by foreigners? How well developed is transportation for goods manufactured in China? Are there already good manufacturing locations, remote from harbors such as Shanghai, with good and efficient railways, hwys, etc, to move the goods effectively to port? Is this a good area for China to look in order to bring work to areas with greatest need for work (and less competition for space than in metro areas)? I guess basically what I'm asking is where should China be focusing? Is it any of the above, or are there other needs that should be addressed first? |
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LeiFeng
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Mar 22, 2004 - 04:39 PM |
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In the past, China has bent over backwards in making it an attractive place to invest if you are a large investor who is going to be contributor. I don't imagine companies like GE or Siemens had too much trouble with bureacracy. For the smallest players, of course, it is a different story; China is not the place for garage entrepreneurs (who want to operate by the book).
Property rights are secure and have now been written into the constitution. I would not consider that an issue.
The government has done and continues to invest massively in infrastructure. Thus, transportation networks are well developed - especially in coastal products (in remoter regions there are grand projects underway but...).
For serious answers to the questions you are asking, you need to pay some serious $$$ to get the answers from people who know their stuff. For my two cents, some of the development zones in the Yangtze river delta are attractive places to invest from all the angles you describe (bad food poisioning incidents at last dev zone promotions). |
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ben@xlnte.com.
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Henry_Chinaski
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Mar 22, 2004 - 05:00 PM |
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That's a nice discussion. Thanks for your compliments, same back to you 
Reason I think Chinese labour / products will still be competitive in the mid-run:
1-Flat labour curve
2-Lowering logistics costs.
In the US the percentage of GDP spent in transportation is lower than 10%. In China it's more than 20%.
What's the only choice to lower logistics costs? Investment in infrastructure. Is this being done? YES, MASSIVELY.
So, the long run trend is to decrease costs EVEN FURTHER.
Same trend for inventory: China's inventory as percentage to GDP is at least double the developed world average. When you start having better infrastructure and decreasing money tied in inventory there will be a lot of money to be spent where it matters the most.
Other countries with cheap labour WILL NOT have this advantage because they wont have the infrastructure in place. As simple as that.
If you see the investment in port infrastructure, road, rail , ... China is clearly ahead of every other single developing nation either in what it delivers today or what it will deliver tomorrow. Is it perfect today? NO. Is it improving? YES. Will it be perfect? NO.
Being involved with some of the biggest retailers out there I can say the potential of further decreasing costs by moving manufacturing upstream the river is also another BIG opportunity to decrease costs. And with that a lot of capital will start reaching poorer regions. Think sourcing from Sichuan instead of coastal areas. Why? Because infrastructure to suck the resources from there will be there in the future. But it might be just over optimistic me you know? Let's see, let's see...
Basically we are sitting in a huge untapped potential. As soon as domestic demands become the focus, there will be even more economies of scale, even more moeny around. Inflation THEN will become a major issue.
Bad debt: indeed loads of it. But look at latest 40 billion sanitization performed with hard cash reserves. This shows commitment in addressing the problem instead of procrastinating. Again, as The Economist says: the guys running the show here are TOP NOTCH. They are NOT sleeping in the wheel.
Go China!
rgds,
HC. |
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LeiFeng
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Mar 22, 2004 - 05:14 PM |
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It's a frightening exercise (for me, at least) to think: If it were me at the wheel, what would I do? What choices would I make? Would they be any better than those already made? Actually, I am sure I could make a positive contribution, but I know I do not have all the answers.
It is clear that the Chinese government is facing a multitude of problems, to mention just a few: rising urban-rural income gap, massive unemployment, fiscal problems (both in terms of currency and banking), increasing transparency, squabbles within the region (N. Korea), questions and without (the US) and appear to be doing at least an adequate job at it. |
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dyniquee
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Mar 22, 2004 - 11:33 PM |
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<applaud>
China has been a big thing for more than 5 years now...India is the next big thing after China...Even Chinese now are studying its market and economy -
Go India!
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Entangled Quantum Effect's at its best. |
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okido
Rocker
Joined: Sep 14, 2003
Posts: 667
Location: A planet called Earth
Status: Offline
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Mar 23, 2004 - 01:11 AM |
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Thanks to all who have contributed their thoughts here. No matter what and how in the future, I am sure many of us would agree that China is an interesting and exciting place to be at this moment. |
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Jeff-HMB-CA-USA
Raver
Joined: Feb 23, 2004
Posts: 494
Location: SF Bay Area (for now)
Status: Offline
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Mar 23, 2004 - 03:53 AM |
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It sure sounds interesting to me - I can't wait to be there!
Does anyone have any thoughts on the state and outlook of China's agriculture and power generation? |
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Brother by nature and choice, Jeff |
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Henry_Chinaski
Board Lord
Joined: Aug 16, 2003
Posts: 5025
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Mar 23, 2004 - 10:32 AM |
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Well, I spent some time doing research for agriculture and dietary habits last year.
Today there is some divergence on what will happen with worldwide prices as China economy grows. We could have inflationary effects here and there. This is similar to what is happening to iron ore, copper, oil and other commodities, although in a much smaller scale. What I think is most interesting is that consumption in agricultural and urban areas will be very different as income in city grows faster than income in the countryside. Improved logistics infrastructure will be an enabler for improved dietary habits in the cities, specially in regard to cold chain management. This somewhat reinforces the thesis that the income pit between cities and countrysides will be ever increasing. This is something to worry about.
Also, agriculture productivity has been on the rise, like everywhere, following global trends. Let's remember though that mechanisation is not as desired here as it would be elsewhere, and thus there is a lot of productivity untapped.
Power generation: 70% still coal, hydro increasing in the short/mid-run, power outtages in a number of industrial areas. This is a big weak spot in this country, but it is being addressed though. Question is: how fast can supply grow? And what will be choice in the environmental trade-off?
Will be fun to watch.
rgds,
HC. |
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