Saturday, June 28, 2003
India V China through ASEAN eyes
It has always been interesting to read about ASEAN's reaction to the emerging rivalry between India and China. Today's Manila Times is carrying a story about the rivalry and its likely impact on the ASEAN economies.
Will China and India drive everyone else out of business? Already their neighbors could see their most vulnerable industries being sucked away—lured by wages that in China average about 60 US cents an hour in manufacturing, and whose rise, despite growing productivity, is restrained by the supply of reserve labor. India’s labor-cost base in some industries is even lower. Even so, the experts say Asean need not fear China’s or India’s emergence into the global economy. Trade benefits buyers and sellers alike. In fact, Asean businesses could reasonably expect their higher-value exports to China to rise. Already China buys more from Malaysia and Thailand than it sells to them.
Will China and India drive everyone else out of business? Already their neighbors could see their most vulnerable industries being sucked away—lured by wages that in China average about 60 US cents an hour in manufacturing, and whose rise, despite growing productivity, is restrained by the supply of reserve labor. India’s labor-cost base in some industries is even lower. Even so, the experts say Asean need not fear China’s or India’s emergence into the global economy. Trade benefits buyers and sellers alike. In fact, Asean businesses could reasonably expect their higher-value exports to China to rise. Already China buys more from Malaysia and Thailand than it sells to them.
