One Billion Middle-class consumers

Ina recent survey by 2020 china and Indian will be a billion middle class consumers. According the survey the term middle-class is termed with an annual income of more than $5,000. According to the survey China would have 650 million “middle-class” people and India 350 million. In 2004 the number was 79 million and 12 million respectively.

Growth of China:

In 1990 china’s share in global GDP growth on purchasing power basis was 10%. But in 1995 it grew to 23% and in 2004 it was 33%. And the work force constructed between 2000 and 2005 is 30 million; by 2006-2010 this workforce is estimated to double to 60 million an increase in 30 million which is the entire population of Canada!

Indian Story:

Indian is yet to make inroads into manufacturing. At the moment India's impact in the global arena is one of service exports and it is going from very, very basic to increasingly complex and sophisticated areas — from mere call centres, to low value add and then increasingly to R&D activities, what people now call business process outsourcing. India's supply of skilled labour force. We're talking about 200,000 Indian graduates passing out every year, but according to a McKinsey report, only 20-25 per cent of these graduates are good. Thanks to the shortfall in quality we're already seeing a huge amount of job-hopping in the services sector in India;

The trick, therefore, lay in corporates in the region leveraging China's growth, its huge domestic market and its lower manufacturing costs, to drive economic growth in their individual countries by building up a partnership with China. India's $40 billion dollar per year service exports are reducing by 2 to 3 times the business operating costs of its outsourcing clients. Manufacturing is becoming increasingly service intensive and India now is actually becoming a key supplier in the service dimension of manufacturing. My message is that globally there is no escape from leveraging from countries which have different advantages... manufacturing for China, and services for India.

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