Balance of power will shift to China and India (1 Viewer)

fish fingers

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supercharged said:
Someone hasn't studied their economics. Countries achieve their maximum wealth and living standards when they trade according to their relative advantages. That is the most efficient allocation of resources. Why spend $10 trying to build something yourself when you can import it for $5 and use the remaining $5 on something else?

It's like a cold country such as Norway spending $$$ building greenhouses to support a mango industry instead of simply importing them from tropical countries. A massive waste of resources when you aren't trading to your relative advantages.
You build for yourself as it provides jobs, involves national spending which increases economic growth, and is often built better in your native nation(at least the West), which for some reason you later speculate it would be worse than if it had been imported. You must remember that people will place more effort in to a product if they know it will be used in their nation rather than a nation around the world. Merely an affect of nationalism, which even now, still exists. This is what the Nazi's did during their economic miracle, and distinguished Economist John K. Galbraith praised them for it. imports are examples of economic leakages, and lead to economic contractions. This is taught very early in the Preliminary economics course.
 

fish fingers

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supercharged said:
But that's why you also EXPORT. With all the money you save from importing products instead of building inefficiently yourself, you plow it into industries where your country CAN compete. Trade is the only path to wealth, having a closed off economy will lead to a Cuba like scenario.
Successful economies export more than they import, so as to increase economic growth as illustrated by the five sector flow diagram. Hence the relationship between imports and exports is more complex than simply exporting as well as importing. You have then speculated:
1. that you save money from importing,(which is often not the case. Imports can be of terrible quality etc. and have to be continually renewed.)
2. That a nation builds innefficiently itself,(why would it build with less efficiency then the nation it imports from? refer to my last post for the reason why this is incorrect.)
3. That the nation cant compete in the particular industry and that it needs to shift the money to other industries. Nations import products in industries which they compete in such as America in oil, and automobiles.
4. trades the only path to wealth(particulary international trade which you imply), which it clearly isnt. There are many paths to wealth that dont involve trade, such as manufacturing, pillaging, mining, conquest etc.
5. having a closed off economy WILL lead to a cuba like scenario. Nations can have closed off economies and still succeed, they just need to have an extremely efficient economy and many resources help. The five sector model can simply be reduced to the four sector model. As it was America pursued a policy of isolationanism for the latter part of the nineteenth century and early part of the twentieth century and of course it prospered.
 

Not-That-Bright

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ALL East Asian Tiger eonomies such as Hong Kong, Taiwan, South Korea and Singapore relied on cheap labour manufacturing to kick start their economies. As wages, economic and infrastructure conditions improved, they moved towards higher end manufacturing and service industries as labour intensive industries headed towards the lower cost mainland.

Mainland China is no different, while its economy is currently based upon mainly labour intensive industries, in say 10-20 years time alot of these industries will move to other places such as Vietnam or India where the wages are lower. China inturn moves up the value chain towards high end manufacturing and services. It's a well trodden path towards economic development.
Stop giving me this 'study economics' crap.
It's easy to see that once China can no longer mass produce goods for the west, their economy will slow. China (and most of Asia's) growth is only assured if America continues to buy their goods.
 

supercharged

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fish fingers said:
Successful economies export more than they import, so as to increase economic growth as illustrated by the five sector flow diagram. Hence the relationship between imports and exports is more complex than simply exporting as well as importing. You have then speculated:
1. that you save money from importing,(which is often not the case. Imports can be of terrible quality etc. and have to be continually renewed.)
2. That a nation builds innefficiently itself,(why would it build with less efficiency then the nation it imports from? refer to my last post for the reason why this is incorrect.)
3. That the nation cant compete in the particular industry and that it needs to shift the money to other industries. Nations import products in industries which they compete in such as America in oil, and automobiles.
4. trades the only path to wealth(particulary international trade which you imply), which it clearly isnt. There are many paths to wealth that dont involve trade, such as manufacturing, pillaging, mining, conquest etc.
5. having a closed off economy WILL lead to a cuba like scenario. Nations can have closed off economies and still succeed, they just need to have an extremely efficient economy and many resources help. The five sector model can simply be reduced to the four sector model. As it was America pursued a policy of isolationanism for the latter part of the nineteenth century and early part of the twentieth century and of course it prospered.
Fark you must live in another planet, I can't be bother answering ALL your posts because there are simply too many.

But firstly imports must be of equal or higher quality relative to price than local products because there would be no point in buying such inferior products at a higher price (imports have the added disadvantage of transport costs). Compare apples with apples. Imports and domestics can only be compared if they compete with the same market. A rolex watch does not compete with a lorus watch for for that reason.

2. All nations have relative advantages and disadvantages and should trade accordingly. Local production is inefficient, IF that country is at a relative disadvantage at it. Example: a country with a highly skilled and paid workforce, trying to compete with a low labour cost nation in the production of labour intensive goods. A massive missallocation of resources as socks and underwear would cost $10 instead of $2 if they were imported. As a result the consumer suffers from having their purchasing power diminished, and the country suffers because money was wasted in investing in an inefficient sector rather than a competitive one. No country can produce everything it needs at the best and most efficient price in the world. All countries benefit from trade, which is whole point in the very existance of the capitalist market system.

3. Also you cannot simply compare terms of trade volumes of good moving in and out. Companies move their production to where they can make the most profit. An example would be American companies moving south to Mexico where they have lower operating costs. The company then makes more money for its American shareholders thereby benefiting America rather than damaging it.

Country A may export more to Country B, but that doesn't mean that Country B is economically worse off, because Country A's exports to B may actually be made by Country B's companies and hence the greater profits end up in Country B.
 

Comrade nathan

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It's easy to see that once China can no longer mass produce goods for the west, their economy will slow. China (and most of Asia's) growth is only assured if America continues to buy their goods.
America's economy is also dependent on China.
 

supercharged

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fish fingers said:
Excuse me? i think America is god? you concluded this from my comments that your underestimating its power? Perhaps you would do well to realise what the term God means, as i do not think America is God, and I have in no way implied this.

All thats obvious is that you underestimate the power America. America can easily destroy other economies with no significant problems. Many people would disagree with such a comment about globalisation. Many believe that it is destroying nations, and is like "trading gold for bronze". you are speculating about the future without substantiation. America could destroy EU(which it never would) or ASEAN without 'trashing itself'. Once again this nation's corporations rule the world economy and its individual constituents. Once again, dont forget this nations history, it has been challenged before and has always survived and prospered,(war of Independence, war of 1812, civil war, WW1 and WW2 with two fronts etc.) this wont change until it is truly challenged outside of just economics.

You asked others not to make irrelevent comments without studying econmics, well I ask you the same in relation to history. This is not true. America has no rivals for world superpower. It dominates and controls other economies. It has the weaponry to destroy all other nations, and its military is much larger and advanced than others. Britain did not have this. Britain always had competition, with France and Germany etc. as you mention later for some reason(strange as it goes against your argument). Your comment about egalitarianism is irrelevent again, I ask you to not make such philosophical and scientific comments without studying it in depth. In case you dont realise America didnt challenge british power in WW1 or WW2. Germany and the Habsburg, Ottoman, Italian Empires did. Britain NEVER had the power that America has, before that as you mention it was in competition with France, America, Spain, Russia etc. America is in competition with NO ONE after the Soviet collapse.
yep sure sure, America is just SOOOO infinetly powerful it can just nuke the rest of the world to hell and its own economy can internally provide for itself with no noticible ill effect at all.

America's overwealming force of arms and massive economy will cement America as the world's sole hegemon by either invading any competition or just by being simply richer than everyone else for millions of years to come until the Sun finally runs out of fuel, turns into a black hole, and sucks in the Earth crushing America into the size of a tic tac.

No point arguing at all. :rolleyes:
 

Not-That-Bright

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You seem really cut about America's power.
Cry more - Noob.

How can you say America's economy will no longer compare with China / India ? The investment being done in China/India... IS BY AMERICAN BUSINESSES! China is not going around buying up/investing in American businesses, it is the other way around.
 

supercharged

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*yawn* America's GDP is smaller than the EU and Germany currently exports more than the US....
 

Not-That-Bright

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America's GDP isn't smaller as far as I know, and yes Germany does export more.
Now I'm going to quote you "LERN EKONOMIKS!", do you think that the ammount Germany exports makes them a greater economy?
 

supercharged

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Check again cos EU does have a larger GDP.

And no because the amount of products a country exports does not make them a bigger player in the world economy, rather the amount a country IMPORTS that makes it a bigger economic kingpin. Why is the US/China economy influential in the world economic growth? Because they are both huge markets with massive demand for imports of the world's goods (consumer goods in US/ raw material and services in China).
 

fish fingers

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supercharged said:
Fark you must live in another planet, I can't be bother answering ALL your posts because there are simply too many.

But firstly imports must be of equal or higher quality relative to price than local products because there would be no point in buying such inferior products at a higher price (imports have the added disadvantage of transport costs). Compare apples with apples. Imports and domestics can only be compared if they compete with the same market. A rolex watch does not compete with a lorus watch for for that reason.

2. All nations have relative advantages and disadvantages and should trade accordingly. Local production is inefficient, IF that country is at a relative disadvantage at it. Example: a country with a highly skilled and paid workforce, trying to compete with a low labour cost nation in the production of labour intensive goods. A massive missallocation of resources as socks and underwear would cost $10 instead of $2 if they were imported. As a result the consumer suffers from having their purchasing power diminished, and the country suffers because money was wasted in investing in an inefficient sector rather than a competitive one. No country can produce everything it needs at the best and most efficient price in the world. All countries benefit from trade, which is whole point in the very existance of the capitalist market system.

3. Also you cannot simply compare terms of trade volumes of good moving in and out. Companies move their production to where they can make the most profit. An example would be American companies moving south to Mexico where they have lower operating costs. The company then makes more money for its American shareholders thereby benefiting America rather than damaging it.

Country A may export more to Country B, but that doesn't mean that Country B is economically worse off, because Country A's exports to B may actually be made by Country B's companies and hence the greater profits end up in Country B.
Can I just say before I start that Not so bright, is appearing to be the brightest person here so far, me excluded of course(no arrogance intended). Please dont attack me but rather the argument if you can, as your opening is Ad Hominem and doesnt further your argument.

imports dont have to be of higher quality. They are often of much lower quality than local products, and occasionally of equal quality. Merely look at imports from China in Australia. There products are generally terrible, and fall apart much quicker than local products but they are imported due to there lower price anyway, as for example a worker in the West may get $20 for each completed clothing item of high quality and a Chinese person may get the equivalent of 2 cents for each poor clothing item and that is why despite travelling costs and tariffs they are still available in the West. The same is true of meat and livestock.

In your second paragraph you ambiguously refer to nations, in a theoretical sense, however this is a terrible mistake. You can only refer to current nations to prove your argument here, as in theory much of what your saying is complete nonsense. A nation with a highly skilled and highly paid workforce is of course going to be able to compete in the more labour intensive industries as well, as there will always be a lower part of the working force, proletarians, that cant particpate in skilled work. they can make far better quality products thus satisfying consumer utility to a greater extent then imports do. the nation will not suffer from this investment either as it provides jobs, thus income, thus increased consumer spending through increased purchasing power, thus increased economic growth. Once again i refer you to John K. Galbraith who admired the Nazi's for their economic ability, and this is what they did.

No country can produce everything it needs at the best and most efficient price in the world. You are once again refering to theory here which isnt correct, you need to specify current countries, as in theory one counrty could occupy the majority of the world's surface etc. and thus produce everything at the best prices. All countries benefit from trade, which is whole point in the very existance of the capitalist market system. Again theoretically they dont, some nations trade "gold for bronze" and dont benefit at all economically but must due to other reasons. The point of the capitalist free market system is not to exist for trade. It exists for private ownership, entrepreneur's, consumer sovereignty etc. and it benfits the aristocracy and Bourgeoisie the most with the proletarians achieving some benefit as well.

Of course we dont just look at volumes but at there relative prices when exporting and importing. Making more money for the American shareholders does not neccessarily benefit the nation. As providing the jobs at home leads to increased employment, increased income for the particular population, increased spending, increased taxes, and increased economic growth. That benefits the nation far more, once again this was the Nazi ideology and the theory used to escape the depression by particular nations.
 
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fish fingers

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supercharged said:
yep sure sure, America is just SOOOO infinetly powerful it can just nuke the rest of the world to hell and its own economy can internally provide for itself with no noticible ill effect at all.

America's overwealming force of arms and massive economy will cement America as the world's sole hegemon by either invading any competition or just by being simply richer than everyone else for millions of years to come until the Sun finally runs out of fuel, turns into a black hole, and sucks in the Earth crushing America into the size of a tic tac.

No point arguing at all. :rolleyes:
Once again lets debate using logic. This is all evidence of using the straw man and is rendered invalid. However I will adress it for you anyway as its pretty short.

Did I say it could "nuke the rest of the world to hell and its own economy can internally provide for itself with no noticeable ill effect at all" No I didnt. Whilst it may very well be able to nuke the rest of the world, it wouldnt, and of course it would impact upon its economy, UNLESS of course, America controlled all but a small portion of the world in which case , yes, there would be no noticeable impact upon its economy.

America's incredible military, technology, land, people and economy have established it as the ONLY superpower, one of an extent not experienced before, and these will continue to allow it to rule for a LONG time as hegemony (theres no such word as hegemon). Its not just that its richer than everyone else, but that its controls everyone else to such an extent. Its not like Rome etc. where they simply have their own masses of wealth that far out number all others, but that their coporations control others economies. Microsoft, MG, Ford, McDonalds etc. control the worlds economies and they can subsequently destroy them.

By the way, Scientists predict that our sun will not die for another 10 billion years(more than just millions).
 

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Just on the Sun point again, it will turn into a red giant (engulfing the Earth) and then (from memory) a dwarf, but it will never become a black hole, and if it did the Earth would most certainly be destroyed before it ever did.
 

fish fingers

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Damage Inc. said:
I dunno why fish fingers is arguing that China and India will not become the pre-eminent powers in the world.

It is quite clear that America is losing its power. It doesn't have half the power it had in the early 20th Century.

China and India on the other hand are gaining more and more strength. China has a rapidly growing economy. In about 30 years it has moved 300 million people out of poverty and increased the average wage by 300%. It also has the largest army in the world.

India has the 4th largest economy and a very large military. However it will take longer than China to develop as it has some very large internal issues which needs to be dealt with.

To suggest that America could destroy the Chinese economy is absurd.

It has to be recognised that soon America will not be the only superpower in the world. And a little after that, it will not even compare with China and India.
Im simply arguing that they wont be the pre eminent powers because its not true. America will be the only power as it is now, at least for the near future. The world is in such a state now that America can exist as the Only superpower for millenia. Lets not forget how powerful Rome was and how long it lasted. America is comparatively more powerful than Rome.

Can you give evidence as to why America is losing its power, and how that will result in it losing its place as World leader. This is a debate and Im open to new arguments. However America has more power than it did in the early twentieth century. For example, it now controls Europe, with the fall of Imperialist Europe and Britain. It controls Australia and New Zealand, it controls Asia, and it single handedly determines what happens to the Middle-east (despite it being part of Asia) and Africa. it now has corporations that control the world, and buy most of the other nations companies, such as European automobile industries.

China and India are only growing because of the West and particularly America and this growth wont continue. Once again it could destroy them without its military if it wanted, and could most definately destroy them with its military. Its corporations can dry out the Chinese and Indian economies, and its allies can be pressured into the same position, hence utterly destroying China and India. China had the largest army in the world during WW2, and only one third was actually armed. It served no use there, they were destroyed by a smaller, better trained, better armed, and more determined force in the Japanese. America is far greater than Japan was, and they could annihilate the Chinese and Indian armies. Particularly with land forces playing such a smaller role today in war. Possibly most important rule in war, quality not quantity. Its what allowed Macedonia, Sparta, Rome Britain etc. to succeed so much.

Again why is it absurd that America could crush the Chinese economy. Its corporations control the world economy and its constituents. It has alliances with all the other significant nations in the world, and can scare many of them into doing what it wants. It overpowers the UN. It has a military that cant be matched, and its technology far out does the rest of the world. America can crush the Chinese economy and any economy for that matter if it wishes.

America will remain for a long time to come the only world superpower. As i have argued they are simply too strong to be matched by the current world and its nations. Ask yourself, what would happen if two hurricanes, such as Katrina and Rita hit Beijing or Shanghai one after the other? They would kill millions upon millions of people. They would dessimate the Chinese economy. They would destroy China, and yet look at America, despite all criticism they are managing, and they will soon arise from this even greater than before. Please stop criticisng America with such unfounded rubbish. We owe so much to this nation, such as the computer and the program your typing on now, and yet people are so quick to criticise them at any opportunity.
 

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mr EaZy said:
if china (God Forbid) were to have hurricane - does anyone think they will handle it better than the US?? (im neutral on this i gtg! :) )
As a matter of fact, the Chinese I know could not believe how a super power could stumble so badly in the rescue effort. The operation should be a piece cake compared to what's being undertaken in Iraq......unless of course it is benign neglect since most of the victims are black.

I am very impressed by the quality of the debate generated by the article.

What do people think about THIS
then?

I did not realize that this is

USA
until I read the caption.
 
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supercharged

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fish fingers said:
Can I just say before I start that Not so bright, is appearing to be the brightest person here so far, me excluded of course(no arrogance intended). Please dont attack me but rather the argument if you can, as your opening is Ad Hominem and doesnt further your argument.

imports dont have to be of higher quality. They are often of much lower quality than local products, and occasionally of equal quality. Merely look at imports from China in Australia. There products are generally terrible, and fall apart much quicker than local products but they are imported due to there lower price anyway, as for example a worker in the West may get $20 for each completed clothing item of high quality and a Chinese person may get the equivalent of 2 cents for each poor clothing item and that is why despite travelling costs and tariffs they are still available in the West. The same is true of meat and livestock.

In your second paragraph you ambiguously refer to nations, in a theoretical sense, however this is a terrible mistake. You can only refer to current nations to prove your argument here, as in theory much of what your saying is complete nonsense. A nation with a highly skilled and highly paid workforce is of course going to be able to compete in the more labour intensive industries as well, as there will always be a lower part of the working force, proletarians, that cant particpate in skilled work. they can make far better quality products thus satisfying consumer utility to a greater extent then imports do. the nation will not suffer from this investment either as it provides jobs, thus income, thus increased consumer spending through increased purchasing power, thus increased economic growth. Once again i refer you to John K. Galbraith who admired the Nazi's for their economic ability, and this is what they did.

No country can produce everything it needs at the best and most efficient price in the world. You are once again refering to theory here which isnt correct, you need to specify current countries, as in theory one counrty could occupy the majority of the world's surface etc. and thus produce everything at the best prices. All countries benefit from trade, which is whole point in the very existance of the capitalist market system. Again theoretically they dont, some nations trade "gold for bronze" and dont benefit at all economically but must due to other reasons. The point of the capitalist free market system is not to exist for trade. It exists for private ownership, entrepreneur's, consumer sovereignty etc. and it benfits the aristocracy and Bourgeoisie the most with the proletarians achieving some benefit as well.

Of course we dont just look at volumes but at there relative prices when exporting and importing. Making more money for the American shareholders does not neccessarily benefit the nation. As providing the jobs at home leads to increased employment, increased income for the particular population, increased spending, increased taxes, and increased economic growth. That benefits the nation far more, once again this was the Nazi ideology and the theory used to escape the depression by particular nations.
LOL you have nfi! You got proof that imports from China are of lower quality than Australia other than your blind prejudice?

That's bullshit again, you have look at the market niche, if a product is designed as a cheap low end throw away such as a Mcdonalds happy meal toy then of course it was never designed to be high quality. You can't compare products designed as low end to high end ones.

However if you take look at high end products such brandname clothes ie. Country Road, Ralph Lauren etc are all high quality, high price products manufactured in China. Same with electronics, look at the back of your LCD monitor, TV, Ipod, Hifi, computer speakers, digital camera, refrigerator, kitchen appliances, fax machine regardless of brand be it Sony, Apple, Canon or whatever, they are all high end products made in China.

And also about Nazi economics that's keynesian economics of huge government investment to stimulate a weak economy. However over the longer term, that leads to problems of its own with government borrowing 'crowding out' private investment and leads to simultaneous economic stagnation and high inflation. All mainstream contemporary economists follow the traditions of neo-classical economics in order to achieve maximum growth and the most efficient allocation of resources.
 

supercharged

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Originally Posted by mr EaZy
if china (God Forbid) were to have hurricane - does anyone think they will handle it better than the US?? (im neutral on this i gtg! )
What's a hurricane gonna do? China was hit by hurricane Talim around the same time as America was kit by Katrina, except they handled it heaps better by evacuating 600,000 residents before the huricane hit :)
 

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