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Dethroning China+1

madhav yadav
November 01, 2023
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Dethroning China+1

madhav yadav

November 01, 2023
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  1. Dethroning China+1 How and why did china became the global

    leader in manufacturing? 31.0% 16.4% 6.8% 5.9% 3.1% 2.8% 2.3% 1.8% 1.8% 1.5% 26.6% Global manufacturing output 2021 China US Japan Germany India South korea Italy France Uk Mexico Rest Strategic development of economy Cheap and readily available labor World class infrastructure and logistics facility Advantage of legacy manufacturing facilities . HSN (harmonized system of - nomenclature) in 4 digits. Major house of telecom and electronics products which are 80-90% produced in china. The above chart shows pre-pandemic manufacturing output of all the countries.
  2. 28.4% 16.6% 7.2% 5.8% 3.3% 3.0% 2.3% 1.9% 1.8% 1.5%

    28.2% Global manufacturing output 2023 China US Japan Germany India South korea Italy France Uk Mexico Rest What is making the dethroning of china possible? Fall in consumption expenditure due to Covid-19. Geopolitical isolation from major world leaders leading to out- shoring of factories out of China. Repeated lockdown due to which low availability of labor in factories and loss of production. Janet yellen (U.S treasury Secretary) announced front-shoring in India as well as Vietnam. Emergence of developing economies like Thailand, Vietnam, Indonesia, with standardized infrastructure attracting factories out of china. The above chart shows post-pandemic manufacturing output of all the countries.
  3. Is India+1 possible? 1,438 1,560 1,590 1,714 1,958 1,974 2,050

    1,913 2,238 2,389 2,612 - 500 1,000 1,500 2,000 2,500 3,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 US $ India's Per capita GDP The above chart represents rising per capita GDP of Indian subcontinent. Source: www.macrotrends.net Re-rating of GDP growth rate by IMF from 6.1% to 6.3%. Presently worlds leader in catering outsourcing demand. Rising per capita GDP also raises disposable income and with large population a popular market place for MNC’s. Government needs to fine tune game changers like Production linked incentives and tax savings schemes associated with sovereign manufacturing for corporates Abundance of cheap and skilled labor, strategic ports, modern infrastructure, right policies coordinated with black swan events.