At a conference Bill Gates recently said US should not be concerned of India and China's growing economies.Not sure why he said that these are definitely the two coutries where people don't prefer 'buying' his Windows.Some recent developments reaffirm that job outsourcing is not that a big deal but in turn will yield higher profits for corporations and job opportunities for population in Asia and America.Some basic facts have revolutionised trade dynamics and changing the operations and strategies of how multinationals function.Not only US but the world economy is benefitting a lot from the recent growth in these two countries.
United States China trade is worth 130 billion dollars a year.Major Chinese export not being software but soyabean.
AIG was formed in Shanghai in 1919 .Operations in India and China will be driving future growth of AIG.General Motors now gets about third of its profit from China.The no 1 car seller in China is Volkswagen.
Intel commands 84% and AMD 16% of China's microprocessor market.12% of Intel revenue comes from China.US market for PC will have a projected growth of only 5% ,corresponding figure for India and China is approximately 20%.Not to mention Chinese population will be buying 3 million digital cameras this years, other asians 5.2 million.
China has 230 million cell phone users (20% of the world cell phone users are in China) and India has only 18 million , I guess they all need Motorola,Ericssion or Nokia handsets.Sales of Motorola mobile phones has increased in India by 200%.Indians are also more willing to take on debt. In the past two years, the number of new credit cards issued has jumped 25% annually, and new mortgages 35%. Five years ago, the average age of a Citibank mortgage holder in India was 41; now it's 28.
According to a recent study, India's youth has more than 10 billion dollars of cash to burn.High earners in India are spending $ 2000 per year on shopping and eating out (India's per capita income is only $ 470).No doubt,Hooters is opening six outlets in India by 2005.Food giant McDonald's has 48 stores in India, 60% of them built in the past 18 months. The outlets see on average 3,000 customers a day, placing the units in the company's top 10%.China is consuming 50% of world's Pork production.A lot is also being spent on fashion & footwear .Sales of Reebok India footwear are growing at 30% a year.
The growth spurt in these Asian Goliaths is not only booming the world economy but also supporting each other a lot. With the declining local consumption and increased capacities India is now one of the biggest steel exporter to China.
As these two most populous nation change the competition in services and manufacturing for ever,there are still their own demons to be fought poverty,AIDS,illiteracy,communal tensions are all time high. Till the prosperity percolates to grassroots,any achievement won't matter.
Little Shyam and Xiang both don't go to primary school,they work to compensate for their family income.Till both have their childhoods back no free trade treaty, no technology will be worth it.