Here are some interesting data points from China. Almost all the data has been obtained from the news letters of John Mauldin (www.johnmauldin.com) and Gave Kal Capital (www.gavekal.com)

Figure 1: China Employment By Industry

The general tendency is to assume China to be a manufacturing powerhouse – which is of course true. Surprisingly, there has been a far sharper growth in employment in the tertiary sector (i.e. services) while there has been a moderate growth in secondary sector (i.e. manufacturing) and a decline in the primary sector. This would imply a rapid rise in productivity – since there is a net migration of labor from primary to the more productive sectors.

Figure 2: Chinese Productivity Growth

Massive productivity increases in the secondary sector would be because of two reasons – increased automation and increased labor productivity. Increased labor productivity is generally a result of better quality of human capital and management. Increased automation is generally a result of increased investment in automation and support infrastructure.

Figure 3: Education Levels in China

The increased labor productivity can be attributed to higher levels of education (i.e. improvement in quality of human capital) as can be seen from the graph in figure 3

There is obviously a plan to substantially raise the quality of human capital as can be seen from the table above.

Figure 4: Trade Balance Composition

Increased automation has increased the overall expertise in capital equipment of the Chinese. As can be seen from the graph above, in 2005, China became a net exporter of capital equipment.

Figure 5: Chinese Expressway Plan

China plans to build about 85,000 km of express roads and spend approximately $250 billion. Their goal is, any city with a population of at least 200,000 should be able to access expressways within 30 minute.

Figure 6: Port Capacity

(TEU: Twenty Foot Equivalent Unit)

Figures 5 & 6 shows the extent to which Chinese are investing in infrastructure. This would impact Chinese growth substantially – increased productivity and more important, would push development further inland. This would lead to further increase in employment growth in the secondary and tertiary sector which have a higher productivity as well as a higher marginal propensity to consume.

Figure 7: Chinese Consumer Debt

There is room for increase in consumer debt in China. There would be increase in consumption levels with increased availability of finance. This would increase GDP as well.

It would be reasonable to conclude that there is more head room for growth in China.

Would any reader have similar information available for India?