China Takes on India on India's Home Turf

ZhongHuaRising ^ | June 11, 2006 | Dr. Bill Belew

[G. Stolyarov II]

According to this report, China is making inroads into India's domestic market.

Imagine that: China can produce textile raw material and export it to India CHEAPER than India can do it on its own.

The increase in imports to India from China is growing at a 33% a year rate.

The reasons:

1. India has lower-scale operations.

2. India cannot fulfill large-scale orders.

3. India cannot produce specialized fabrics.

Thus, India has to rely on imported fabrics.

It appears that the quality of products produced in China and Taiwan is higher. These products have more uniform shades and fewer defects than those home-grown in India.

I must admit that even I am surprised by China's strength. They can export things to India cheaper than Indians can produce themselves.

But, the reasons above make sense...

What do you think?

[G. Stolyarov II]

It seems that China has a comparative advantage over India in textiles; the importing of Chinese textiles will redirect Indian labor toward more efficient tasks which Indians can perform at a comparative advantage over others. It will result in growth in the standards of living of Indians, Chinese, and everyone else. See Dr. Belew’s blog at ZhongHuaRising

[Gengis Khan]

For now India (is among the very few countries that) has trade surplus against China but that might change very soon.

[MimirsWell]

The surplus, I must sadly note is actually because of steel. We are selling it to the Chinese, helping their economy grow instead of ensuring cheaper construction material for our own infrastructure projects and for our own auto industry. :(

I live in China and I can see a lot of really crappy Chinese textiles on sale in China itself. To claim that India doesnt make high-quality stuff is rubbish. Actually, most sourcers turn to India for high-end stuff and to China for low-end clothing. Recent news reports also seemed to suggest the same.

But however, I take this with a pinch of salt. A lot of foreigners who live in China are blinded by Sinophilic urges. Especially the "I wish I was Chinese. I am American but I hate Bush" variety. The guy who writes this blog has a Chinese wife and seems more of a pro-China activist although I haven't read his other posts. Dont read much into it. Also, to claim India doesn't have the scale is only in terms of big buyers like Walmart and Ikea. But even they source from India. I seriously doubt that China can "export" to India at more competitive prices than the local industry. I think its more the fakes that are available in China that are being smuggled into India that you can find in all these street corner fashion shops that is the focal point of the blog. This we have always had. Before it was Thailand and Indonesia from where such clothes were smuggled, now its China.

[MimirsWell]

The surplus, I must sadly note is actually because of steel. We are selling it to the Chinese, helping their economy grow instead of ensuring cheaper construction material for our own infrastructure projects and for our own auto industry. :(

I live in China and I can see a lot of really crappy Chinese textiles on sale in China itself. To claim that India doesnt make high-quality stuff is rubbish. Actually, most sourcers turn to India for high-end stuff and to China for low-end clothing. Recent news reports also seemed to suggest the same.

But however, I take this with a pinch of salt. A lot of foreigners who live in China are blinded by Sinophilic urges. Especially the "I wish I was Chinese. I am American but I hate Bush" variety. The guy who writes this blog has a Chinese wife and seems more of a pro-China activist although I haven't read his other posts. Dont read much into it. Also, to claim India doesn't have the scale is only in terms of big buyers like Walmart and Ikea. But even they source from India. I seriously doubt that China can "export" to India at more competitive prices than the local industry. I think its more the fakes that are available in China that are being smuggled into India that you can find in all these street corner fashion shops that is the focal point of the blog. This we have always had. Before it was Thailand and Indonesia from where such clothes were smuggled, now its China.