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India and china are definitely on the move as a rising power. India is set to emerge as the top power and china in second when compared to the US presently. India's automotive industry is thriving. While the U.S. automobile sales have been delayed since in April 2007, India's rose 11.8 percent year-to-date (105,962 units vs. 94,771).
In china, experts estimate that China's vehicular population will keep increasing from the 10 million as of 2007. With India's remarkable growth rate, they're expected to double automotive this year, and keep going from there.
The US automobile industry was one of the countries industries that were affected by the recession.
Due the stalled development in the US automobile industry, Sales in the U.S. dropped 21.2 percent to 10.4 million units for their main manufacturers which are Ford, Chrysler and general motors. Their market share decreased from 70% in 1998 to 53% in 2008. This decline in car sales affected both US based and foreign car manufacturers. Manufacturers like GM Motors later announced the sale of their Hummer brand of off-road vehicles to Sichuan Tengzhong Heavy Industrial Machinery Company Ltd., a machinery company in western China, a deal which later fell.
If china and India emerge as the world's largest economies by 2020, America will lose its position as the world's largest manufacturer of automobile to china and India
This is because India and china will have one of the fastest growing economies, which makes many U.S. companies view India as a potential profitable market. It is expected that their automotive industry will play an important role in helping the economy to continue to grow.
Also, also with increase in china and India's workforce when compared to the US, domestic sales are expected to grow dramatically, especially India which plays a significant role in the global automotive market. The world's top manufacturers, General Motors, Ford, Toyota, Honda, and others, have a significant share of already established manufacturing bases.
These manufacturers hope to not only capture an emerging market, but also to use these bases as export hubs to serve the region and the global market.
More-over, because of the cheap labor in these countries, most US automobile makers have their offices outside the US therefore a decrease in the US workforce and most likely it's foreign investment.
Economic competition between China and Japan has been seen in various ways playing out in various Ways upon the international scene. China is succeeding Japan As the leader in Asia, and Japan has to yield diplomatic territory to Beijing.
For example, China is now the third largest producer of manufactured goods and its shares have risen from four to 12 percent in the past decade. It should exceed Japan in a few years, not only in share of manufacturing but also in terms of exports. Competition from the China's price is already exceeding that of manufacturers worldwide.
In 2005, china had some diplomatic feuds with japan. China was informed by Beijing of its plans to phase out its yen aid loans (actually a form of war preparation) at 2008.
These loans include some 80- 90% of all Japanese aid to china.
In 2004, Russia chose Japan over China as a future oil customer by announcing that it would build a pipeline carrying Siberian oil to a Japan Sea terminus instead of to China.
On the other hand, Japan's economic recovery has been maintained partly by exports to China, and Japan's businesses have also merged with China as an important manufacturing stage for their products. Japan now trades more with China than with the United States. Statements by both Beijing and Tokyo indicate the interest of mutually beneficial trade among each other.
Analyst predict that by 2020, China will most likely be the most important trading partner for regional giants such as Japan and India but First, the United States will still be the largest economy in the world and also the most powerful military actor.
Secondly, they also predict that other regional first-rate powers such as Japan and India-who both have a wary eye on China-will, take up more of the security burden, this means that countries surrounding china including japan, have to be protective of their boundaries against Chinese invasions especially when it comes to naval supervision. And this is already occurring at the moment.
Lastly, the rise in china at 2020 will increase ties between the US and japan just in case any matter arises. E.g. Military assistance.
China, with its large growing economic and political weight has always been an important factor in the Asian region. Its huge economic development over the past two decades has brought new opportunities and challenges to the countries of Southeast Asia.
With China as a member of the south East Asian nations, it boosts their trade by 30% last year. As most of ASEAN have benefited from their trade and investment opportunities with China, there is still some considerable debate in Asia over how China's economic rise will change the economic, political, and security landscape.
When china became a dominating factor at the south East Asia, India became worried about china's role. India realized that china has provided military support to all India's neighbor and also to Pakistan for its nuclear program.
This has been a serious threatening factor for India. These threats went further to include the indo china region which can also threaten India's security since many south East Asian countries share borders with India.
In other to break china's bond with these countries, India attempted to improve its ties with Southeast Asian countries.
With china and India rise in power at 2020, India feels more comfortable since the Asean state feels threatened with china's rise to power because there has been an imbalance of power since china started to experience economic growth
The Southeast Asian countries considered that it was right to guard against the Chinese influence by setting up vital sea lanes of communication such as with Taiwan, Malacca, sunda and Lombok straights.
Furthermore, the ASEAN countries choose India on their side because of its large naval force in the Indian Ocean and nuclear capacities and also a tactical partner to balance china's growing power in the region.
More-over, there are also worries about the Indian navy and its nuclear capabilities as India itself possesses the ability to yield substantial influence and power in the region.
With India and china as the world's largest economy by 2020, this implication for EU will be that first, both countries (India and china) will be hit by a tough emission reduction targets than the European Union.
The EU will insist that the developing countries around these countries have to be compensated for the greenhouse effect emitted by these two countries.
Getting this countries involved in climate change agreements will be difficult because climate concerns has clearly taken the backseat based on the priority these countries place on development. Traditional approaches to involving reluctant countries in international climate policy have been proven to be incapable of luring these countries' cooperation.
Based on these challenges faced by the EU, 29 European companies had called on the EU to foster its plan to cut EU emissions to 30% by 2020 with the aim of strengthening Europe's economic future by advancing more jobs and providing greater certainty and predictability for investors.
This idea signifies a growing union of businesses and climate ministers that believe that the EU must review its climate policy to secure a long-term economic advantage with China and India in the global market for low carbon goods and services.
The current European target is for the EU to cut emissions by 20 per cent from 1990 levels by 2020.
It is the first time such a large of different groups of businesses has called on the EU to increase its plan to cut emission to 30.
Similarly by 2020, china and India may gain in welfare because of the strong terms of trade effects, the sale of carbon and better productivity for energy commodities and so the problem of the sharing criteria or funding will be aimed towards the developing countries with welfare loses.
And these may go against china and India's negotiating standing point of being compensated for international emission commitments.
Business strategy of today's EU, US and Japanese based Multinational Corporation
From 2004 to 2007, global multinationals increased their total R&D locations by 6 percent, and of those new locations, 83 percent were in China and India. They also increased R&D staff by 22 percent and 91 percent of that increase was in China and India.
Record shows that, companies in the U.S. spent the largest amount on R&D in other countries, making the U.S. the top "net exporter" of R&D spending, followed by Japan and Switzerland a euro nation in third place.
At the moment, the original reason these countries outsources it's research and development to low cost countries was to save money in order to replace its higher paid home country experts with lower paid replacement to save money. When India and china emerges as the world leader in 2020, these low cost countries maybe more expensive for R&D when compared to the cost of the labor at the firms home country. This is because the demand for skilled workers at the low cost country will be on the rise thereby causing an increase in price for them.
Another reason was for new talent. This is because Lots of these firms from the US, japan and EU head overseas in search for young talented engineers and scientist. EG, In India, the number of skilled engineer is increasing rapidly. Companies will locate overseas in search of access to the growing numbers of talented engineers and scientists around the world, and to the ideas that they are generating. The number of skilled engineers is increasing rapidly.