Asia vs America - Economic Growth
The economic growth in both India and China has been exploding over the past half a decade. Nearly 3 millions jobs in the manufacturing area in the United States have been lost to these two countries. Now one must ask, how will this affect our economy and our growth? Is this a good thing or a bad thing?
There is both an upside and a downside to the explosive economic growth in India and China. On the upside the American market has been and will continue to be flooded with inexpensive, quality goods and products which the average American consumer can afford and use. In addition to this those involved in U.S. export sectors will also benefit greatly in that it is expected China and India will be looking for “Western-style” goods and services as more money and wealth is pumped into their system. These goods and services include cosmetics, jet liners and banking/financial and investment services.
Now looking at the downside, its obvious how hard times can get if America doesn’t wake up and get back in the game. Those workers in the U.S. who are less skilled, which is the majority of workers it seems, are being put out of work and left with no options for income. Additionally even the more skilled workers in the U.S. including computer programmers and some financial analysts are having a hard time as well. The giant corporations of Asia are not stupid, and they see where the money is. Because they can offer labor and services at a cheaper rate than is available in the U.S. they are targeting the American market, putting thousands out of jobs.
The agricultural industry in America has been possibly the largest gainer from these recent economic changes. Because of China’s and India’s growth and move to a more industrial/technology related market, their demand for food products and produce has increased. Agricultural exports to China tripled between 2000 and 2004 and exports to India are also up. The owner and founder of Farmers International commented on Asian growth and had this to say: “This market is going to grow further because of the rising purchasing power in Asia.”
As mentioned before, it is only a matter of time before growing Asian countries start demanding goods from the U.S. and shift from an almost entirely export market to a mix of imports and exports. As China’s economy grows and wealth increases, there will be more of a demand for environmental care, health care and housing. These are all services which America is prepared to offer.
As of this point in time it is hard to tell what the future has in store for these 3 countries. All that can be done is sit back and wait. Right now China and India have the upper hand in economic growth, but this growth will bring changes and may turn the tides very quickly.