I’ve read a number of reports from experts extolling the virtues of investing in India and China. One even had India as the best investing idea for 2017.
I just returned from both countries after spending days on the ground and in meetings with billionaires, high-ranking politicians, factory owners and the man on the street. Everything I learned opened my eyes to the reality at street level. It’s not pretty… for the United States or for the rest of the world’s developed economies.
At the same time, what I learned from the sources – which were not thirdhand information or tidbits from the internet – is that both countries could not be better poised to exploit the heck out of the West… despite the threats of the incoming administration about sanctioning trade, tariffs and protectionism.
China and India have very little in common, contrary to popular belief. To compare the two countries on any level would be a mistake.
One is so far ahead of the other that those who offer comparisons are blowing smoke up your proverbial skirt.
Yet the two similarities they do share should scare the bejesus out of you.
Both have an endless supply of cheap labor, and both are ahead of the game when it comes to educating a significant portion of their populations.
This is important to note. With a population exceeding 1 billion in each country, you just can’t expect to make a blanket statement like “each is educating its entire population.”
Statements like that make me cringe and wonder about the validity of the source. Neither is educating its entire population – that would be disastrous. Even educating 10% at a very high level would mean 100 million-plus people in each country, and that should make the world shudder.
While in New Delhi, I visited the R.K. Puram School. It was having an annual year-end event, and my host, Canada’s high commissioner for India, was the guest of honor. He was presenting awards to students for accomplishments.
R.K. Puram is one of the top high schools in the country. As I sat watching the awards ceremony, I noted that the awards and achievements were not just the usual ones for arts and athletics.
The vast majority were for technical prowess for things like computer science, innovation in technology and mathematics. Of the graduating class, a huge number had already secured scholarships at major U.S. universities, especially schools like MIT and Stanford.
In China, the story is not very different. Take Shanghai for example. As you can see from the chart below, which measures mathematical proficiency, the students in Shanghai are leaps and bounds ahead of most of their Western counterparts.
Source: PISA
This is a survey of 15-year-old students around the world. Extrapolating their performance on higher education and ultimately the global workforce isn’t much of a stretch.
We’re hearing a lot of rhetoric about trade wars, tariffs, immigration and barriers of all sorts. We’re hearing that jobs are being lost to developing countries with lower wages at the expense of U.S. manufacturing.
Some of this is true. But if the U.S. is to compete globally, no amount of tariffs or barriers is going to make up for the advent of technology in the workforce or a need for a highly educated population. We are failing our children in this respect.
And while the last place in the world I would ever live would be India or China, there is little doubt that a few decades from now, maybe even sooner, the East will be the new West.
The next issue of Beyond the Dollar will be perhaps the most important issue to date. It will dive deeper into what’s really happening in both countries with hard examples of what it is that we’re up against in the West.
Much of it won’t be pretty. It may make you sick to your stomach. But it’s as real as it gets, and being ignorant of reality is the best way to make the wrong bets in the market.
The pundits are telling you half the story. We’re going to tell you all of it. Sign up here so you don’t miss a thing.
Good investing,
Karim Rahemtulla
For The Non-Dollar Report
The post Can You Handle the Truth About India and China? appeared first on Non-Dollar Report.
