• 1,139 days Will The ECB Continue To Hike Rates?
  • 1,140 days Forbes: Aramco Remains Largest Company In The Middle East
  • 1,141 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,541 days Could Crypto Overtake Traditional Investment?
  • 1,546 days Americans Still Quitting Jobs At Record Pace
  • 1,548 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,551 days Is The Dollar Too Strong?
  • 1,551 days Big Tech Disappoints Investors on Earnings Calls
  • 1,552 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,554 days China Is Quietly Trying To Distance Itself From Russia
  • 1,554 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,558 days Crypto Investors Won Big In 2021
  • 1,558 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,559 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,561 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,562 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,565 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,566 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,566 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,568 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

Be Bullish On China/India Because of Their Supply, Not Demand

In the March 1 FT, Todd Thompson argues that one reason to be optimistic about the economic growth prospects for China and India is the potential demand for goods and services emanating from these two populous regions ("Asia's dance of the twin elephants," http://news.ft.com/cms/s/597191ce-a8c8-11da-aeeb-0000779e2340.html). The principal sources of demand are increased consumption of a rising middle class and infrastructure needs. Mr. Thompson was either dozing during the first Econ 101 lecture or did not take the course. As anyone who was awake during that lecture knows, supply is the economic challenge, not demand. Anyone who has children or is acquainted with U.S. baby boomers knows that the demand for goods and services is unlimited. It is the supply of those goods and services that is scarce. India has "needed" an improved infrastructure for decades. And it has a teeming mass of citizens that "need" more food, clothing and shelter. So, India's economic challenge has not been demand. Rather, India's economic challenge has been to produce the quantity of goods and services to accommodate this demand either directly or through trade. The reason to be bullish on the Chinese and Indian economies today is that through deregulation the inherent talents of their populations have been allowed and encouraged to be employed in productive ways. The reason to be bullish on the Chinese and Indian economies is because of their potential to supply more goods and services, not their potential to demand more.

Back to homepage

Leave a comment

Leave a comment