With a $10 billion+ sale on single's day for Alibaba.com & even Flipkart clocking a billion $ sale on mega sale days, which geniuses are building malls? Have no utility beyond movies & restaurants. The day Chinese became the factory of world, including clothing along with digitalisation of western populace, malls were doomed. Who wants to pay inflated prices for brands when poor IP law implementation allows same Chinese manufacturer to churn out clones for 1/5th price to consumers.
If you take the point that public investment in infra follows GDP boom and not vice versa, then it's bad news for all the ghost towns and public infra like airports that China has built up. They will not spur economic growth and unless there is some other form of stimulus that spurs growth then this infrastructure will be sitting there for a long time before it gets utilised. One example that I keep on citing for India is Noida toll road. It started in 2002 ( If i remember correctly) has not turned operationally profitable till date.
Similar case can be built for Bandra-Worli Sea link. There are simply not enough car commuters to pay fee & thus enabling return on investment for this project.
The problem with public infrastructure is very similar to your car. Its starts to depreciate in value from Day 1. Since all of this infra was built with public money, the loans are not being serviced or there is an increased interest component, which means there's no money for the upkeep of the infra.
The problem with public infrastructure is very similar to your car. Its starts to depreciate in value from Day 1. Since all of this infra was built with public money, the loans are not being serviced or there is an increased interest component, which means there's no money for the upkeep of the infra.
Politicians often prefer dams, interstate highways and bullet trains that make the news, critics add, rather than schools, hospitals and smaller projects that may be more economically productive.
India is now pushing high-speed rail between urban centres,Which may have returns but putting 4 lane roads doesn’t do much for villagers. They really need a one-lane road only that can be maintained & livelihood sustained. Economics is really simple. If you have no money and you want to build a house, pretending that you do have money still won't allow you to build a house. That's because you need actual capital to buy material and labor. Pretend money won't work otherwise every third world will get first world infrastructure just by pretending.
Now you can pretend and fool an external money source but that won't last long because monied people and nations don't get to be rich by being stupid. Look at Argentina. No one lends to them anymore. Now you can look around & see how struggling malls, unsold housing stock & then look at bank balance sheets with roughly 11lac crores as CDR & NPA. This is almost 25% of total lending amount of India's banking system.
Infact the success of ecommerce in china indicates mega malls of unsustainable size might struggle even more in future. malls can only serve a certain radius be it 50km or 100km. ecommerce can serve the whole country from a dozen warehouses in low cost locations but near highways/airports/railways for logistics.
The internet has become a critical element of China’s economic progress in the past five years, accounting for seven per cent of the world’s second largest economy’s gross domestic product (GDP) in 2014, a percentage point higher than the US, state-run Global Times reported, citing a report issued by China Internet Network Information Centre (CNNIC).
China has exceeded the US to become the world’s largest online retail market, it said as the online retail transactions reached 2.79 billion yuan (USD 439 million) in 2014, one of the key economic achievements of China’s Internet development during the 12th Five-Year Plan period (2011-15).
However, according to US journal Statista, US online sales last years accounted to about USD 290 billion.
In 2014, the number of online shoppers climbed to 361 million, representing 55.7 per cent of the nation’s shoppers.
Online shopping represents 20 per cent of all consumer demand, the report said. For the first time mobile phones have become the most commonly-used platform to access the internet, followed by computers. Some 594 million people in China can access to the Internet through mobile phones. In India the same number is around 350 million & almost 65% access through mobile phones.
India is now pushing high-speed rail between urban centres,Which may have returns but putting 4 lane roads doesn’t do much for villagers. They really need a one-lane road only that can be maintained & livelihood sustained. Economics is really simple. If you have no money and you want to build a house, pretending that you do have money still won't allow you to build a house. That's because you need actual capital to buy material and labor. Pretend money won't work otherwise every third world will get first world infrastructure just by pretending.
Now you can pretend and fool an external money source but that won't last long because monied people and nations don't get to be rich by being stupid. Look at Argentina. No one lends to them anymore. Now you can look around & see how struggling malls, unsold housing stock & then look at bank balance sheets with roughly 11lac crores as CDR & NPA. This is almost 25% of total lending amount of India's banking system.
Infact the success of ecommerce in china indicates mega malls of unsustainable size might struggle even more in future. malls can only serve a certain radius be it 50km or 100km. ecommerce can serve the whole country from a dozen warehouses in low cost locations but near highways/airports/railways for logistics.
The internet has become a critical element of China’s economic progress in the past five years, accounting for seven per cent of the world’s second largest economy’s gross domestic product (GDP) in 2014, a percentage point higher than the US, state-run Global Times reported, citing a report issued by China Internet Network Information Centre (CNNIC).
China has exceeded the US to become the world’s largest online retail market, it said as the online retail transactions reached 2.79 billion yuan (USD 439 million) in 2014, one of the key economic achievements of China’s Internet development during the 12th Five-Year Plan period (2011-15).
However, according to US journal Statista, US online sales last years accounted to about USD 290 billion.
In 2014, the number of online shoppers climbed to 361 million, representing 55.7 per cent of the nation’s shoppers.
Online shopping represents 20 per cent of all consumer demand, the report said. For the first time mobile phones have become the most commonly-used platform to access the internet, followed by computers. Some 594 million people in China can access to the Internet through mobile phones. In India the same number is around 350 million & almost 65% access through mobile phones.
And when it's pointed out that the total e-commerce $ value in China was just 8.3 per cent in 2013 and projected to be just 12 per cent in 2015, you turn that around to see how US/Indian/Chinese malls are doing bad!!
Are baba or shall I say Alibaba!!
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