M D'Mello: Chinese works on the strategy of mass production (less durable) and mass consumption. Main reason of their low cost is the low capital investment and export friendly policies of the Government in China. China is buying raw material from all across the world (has huge investment in resourceful Africa) and selling the end product back to the world. China is the second largest exporter in the world after Germany. It has been predicted that China will also cross Germany in the export by the World Trade Organization (WTO).
Response: 1. It is true that India's trade deficit with China is increasing despite the Make in India campaign of the govt. That is because the campaign is all empty gas. Just PR and Headlines Management. It needs holistic solutions and vision for changes to happen. And changes do not happen overnight. 2. China has peaked and its economy is on a downside. There are many ghost towns in China with manufacturing operations closing shop. India was the only growing economy till Modi derailed it with his ill advised demonetisation. This has set the country back by at least 2 years. While no new employment has been created in 2.5 years, the unemployment has doubled during this period. 3. While Trump may have America's best interests in mind, the way he is going about things like a bull in a China shop, he is bound to collide sooner than later. 4. Shutting out foreign employees or foreign products will hurt the US more. Corporates run on profits, not sentiment. Many US companies have transferred their registered offices to Ireland to avail of tax benefits because tax rates in US are higher. Paying high wages to Americans will prove costly to US corporates and will hurt their profitability. It is possible that instead of foreign workers coming to the US, the work may be outsourced to employees based out of their home country. Regards, Marshall
