The economic rise of Asia has been swift, but it has also been a little reckless at times.
China’s rapid spending and investment has come at a price. The country is now saddled with a massive debt bomb that could detonate at any moment. Further, economic interests have helped to create a precarious situation in the South China Sea, which many experts see as having escalating potential for armed conflict. Such actions would disrupt trade along one of the most important sea routes in the world.
To be fair, no one ever said that executing on five-year plans would be easy.
The Economic Rise of Asia
Despite the possible economic landmines that could be waiting for China, it is still impressive how fast this all happened.
China now has the second-largest economy by a wide margin, but before the 1990s the country did not even crack the top 10.
The following three animated charts from data visualization whiz-kid Aron Strandberg help to tell the story of the rise of China – and how India is projected to follow in those same footsteps.
By the year 2030, it is projected that China and India will both be in the top three economies by real GDP. Even with growth continuing to stagnate, Japan remains in fourth place.
European economies such as France, Italy, and Spain also begin to slow in their pace of growth as the European Debt Crisis, demographics, and other factors start to weigh on them in the late 2000s.
Here’s another look at the top 10, this time with a focus on the share of the global economy that each country will have. This chart really shows the effects of this aforementioned stagnation in Japan, as well as the slowing growth in Europe.
Japan’s share of the world economy drops like a rock – and the same goes for countries like Italy and France, which also fall down the list.
By 2030, the United States, China, and India now make up almost 43% of the global economy.
Lastly, we show GDP per capita charted against population share:
They can predict global GDP by country out to 2030? Neat trick, bro. Now why can’t they tell us the unemployment and inflation rates in the US, right now?
“China’s rapid spending and investment has come at a price. ”
Yeh. We call them Ghost Cities.
What will be the best ways to invest money in the Indian economy that represents a growing piece of the world economic pie?
I am a working person in my early 30s. I have a 401(k) through my work that lets me invest in different kinds of index funds, but no independent investment portfolio at this time. At one time (at the end of the stock market crash of 2009, right when they bought LandRover and Jaguar), I owned many, many shares of the Indian conglomerate Tata Motors (TTM) that I purchased for under $4 and sold at around $30. If I recall, I spent the proceeds on heroin, hospital bills, and student loan payments (ah, to be young again).
If I had some spare money kicking around, I would shovel it into my long-dormant Ameritrade account and try to move the money into some long-term positions that would pay me later for having some good hunches now. This article makes a convincing case for the growth of the Indian economy over the next fifteen years or so, and confirm what I’ve seen from my position on the ground in the global economy.
I work as a buyer at a “luxury furniture importer”, and this company does lots of business with Indian factories in the procurement of wooden and ceramic finished goods. The markups we put on the stuff would make you sick. $3,000 chandeliers that cost us $200 and stuff. We get shipping container after shipping container full of stuff from Indian suppliers, and we break em down and move the units to whoever the people are who can afford to buy it. Or this is an even neater trick- we’ll order a shipping container full of “bar carts” (like wtf is a bar cart, and who in the fuck keeps buying them?) for 110 each, and have the manufacturer slap some other company’s labels on the boxes right there in the factory in India. Then we’ll charge the company who’s gonna retail them like $200 each for them and have the container shipped directly to them, and they’ll sell them for $600 each. The Indian supplier is gracious enough to send us an invoice for us to pay the $110 each for all the units, and they’ll also prepare another invoice for us to send to the recipient company for them to pay us the $200 each. We’ll make like $12,000 off one of these transactions, we don’t have to hold the product for a single second, and the profit from the whole thing can go straight into our owner’s NetJets account. It’s slick enough to make you want to puke in your mouth. Not that I am bitching. It works out OK enough for me.
From what I’ve gathered in my limited tenure there, much of the revenue generated by this middlemanning activity goes to somewhat-comfortably support an office staff of 80-some doughy people who spin around in their office chairs and shop for shoes online most of the day- that is, when they’re not “facilitating” the “managers” who “manage” the “supervisors” who “direct” the “leads” of the teams of wage slaves that push the pallets of the stuff around the warehouse. It is a total microcosm of why everything costs so much in this country.
If you extrapolate this one example to every other business of equal or larger size in America, you can understand why it nowadays costs 2 people $18 to eat lunch at Popeye’s. Or why an armload of groceries costs $40 now.
But one thing I have seen for myself is that the production capacity of Indian manufacturing companies is a beast.
Anyway, I know this site is not necessarily a forum for investment advice or anything like that, but TBP is one of my favorite websites and I read just about every word published here. I highly respect the minds of the writers and aggregators of this site. And if you are reading this, you are probably pretty interested in the kinds of things discussed in this article, and maybe you have some useful stuff to say on this subject.
I don’t think I’ve ever commented on anything on the internet anywhere ever before this, so I’m sure this was a bunch of dumb extraneous stuff to write about when I’m trying to ask how to invest in India. So, what do we do about making some money on India? This guy I work for clearly is.
Cheers