China Has A Solution To One Of Modi’s Problems
Narendra Modi has a serious problem: his economic policies don’t create enough jobs to employ the country’s growing young labor force. And he needs to find a solution to the problem quickly, before the 2019 elections. Otherwise he will be history.
But like all of India’s problems, China claims to have solutions to its neighbor’s employment problem.
Turn India into its backyard factory for labor intensive products.
That’s according to a recent Global Times editorial, which advises Modi to work together with China to develop labor intensive industries. “It would be best for Sino-Indian cooperation, for the time being, to be focused on labor-intensive and export-oriented industries, which could tap into India’s abundant labor resources,” writes Mao Keji, researcher with the Pangoal Institution. “Considering both countries’ comparative advantages, such cooperation may well relieve India’s current trade deficit, and other issues such as overreliance on foreign capital and insufficient employment opportunities, while providing China with more avenues for growth. Industrialization is vital for India to become a global economic powerhouse, and China can benefit by playing an active role in this. Fortunately, both India and China now seem readier than ever to deepen bilateral cooperation in this aspect.”
What sort of cooperation? Some kind of “created in China, manufactured in India” relationship.
That’s the kind of cooperation that China desperately needs for a number of reasons. One of them is that rising internal labor costs has eroded its competitive advantage vis-à-vis countries like India and Vietnam.
Then there’s China’s need for new markets for products that face US tariffs. And additionally, the need to get rid of its polluting industries, which have made life miserable for its citizens.
Does India need this cooperation?