As expected, China will become the second biggest defence spender after the USA. However, the most interesting aspect was the future of global and asian business. China will continue to be the engine for world business growth. However the existence of strong domestic capital markets in India coupled with a strong knowledge based economy will cause India to retain stability in growth.
To justify my assertions, I decided to take a look at Manufacturing News. An interesting news was the relocation of chip manufacturing fabs from Taiwan to China. Since, I have an insiders knowledge of that particular industry, I know that Taiwan is famous for its reliant chip fabs. TSMC is well known for its Reference Flows which validate approved design flows for tape-out. Which makes this move all the more surprising. Why?
Another news source I found, refers to a proposed 2.4 billion USD investment by the Chinese Govt. in power. Fabs are ultraclean environments, and extremely power hungry. Enchancements to infrastructure by the Chinese govt. come as a lifesend to the chip manufacturing industry.
Simultaneously however, a parallel news item listed the growth of the Bangalore Intel design centre as the largest design centre outside the US. What does this imply in terms of economic stability?
A chip manufacturing plant is much more human-resources intensive than a design centre. Any fluctuations in global technology markets will be much more pronounced in China, than India. According to Goldman-Sachs, India-China business is projected to rise fast from the 7.6 billion USD, it is now. This growth has to be in conformance with the synergy of knowledge and manufacturing industries working together.
One of my earlier posts makes a case for startups in India. What worries me about China is the manufacturing base. In a good year, their capital returns would dwarf India’s. However, this capital may be used to power their own knowledge economy. There’s only one thing we can do - never stop running.