When the "made in China" encounter India

- May 27, 2016-

India to follow China to do special zone"

Has led the Chinese export manufacturing industry to take off the special economic zone of India now flowering, the SAR not only enjoy tax concessions, but also independent construction of hydropower and other infrastructure, government control is also less. At least 75 special economic zones have been approved on the road, starting to run more than 10. China has made use of the special economic zone to carry out policy experiments, and has inspired the enthusiasm of the whole country to set up special economic zones.

At the fastest pace in Tamil Nadu state, the enterprises have been quietly settled, enjoy the benefits of reform here, and the whole world is unaware.

Vitoria's secret, the US's largest underwear brand, "buys" 650 lingerie each year, near global purchases of 1/10, whose parent company owns a factory in the city. NOKIA has just built a plant, with an annual output of 30 million mobile phones, accounting for the world's total output of at least 1/10. Hyundai Motor Company in the state of Tamil Nadu workshop every minute there is a car off the assembly line, India has become a global production base for the company's mini car SANTRO, company plans this year to 60 countries Transport 10 million cars from India. Within two years this figure reached 30 million.

Hyundai Motor India business responsible for HeungSooLheem in explain why his company will choose to invest in India, said: "from the geographical perspective, here from the market closer, here is followed by a well-educated population, furthermore is here suppliers although is not better than China, but also more or less the same, labor value is lower."

Infrastructure is not as good as China

When the Chinese manufacturing industry set off a global investment gold rush, BMW, general motors and Intel and other multinational companies with many from unknown, South Korea, Italy and other countries enterprise together in Tamil Nadu state with the purchase of real estate. In Madras port, the land on the outskirts of the land 20 years ago, the price of $1000 per acre, or $2500 per hectare, and now the price is 65 times that of the time.

Madras suburban SEZ Mahindra World City chief operating officer B - G - Manon said: "next to India is China's second biggest manufacturing and international enterprises are optimistic about India, otherwise will not come this to buy assets. BMW and other companies have bought large tracts of real estate from his hands.

No one knows how many jobs were created. However, the government recently released data show that the single car and related industries employed more than 10 million employees, this figure is greater than the 90's last century, the total number of workers in India.

India's manufacturing industry is starting to emerge as a global business looking for alternative investments outside China. Shortage of professional talent caused Chinese wages rise, resulting in the rise of China's manufacturing costs, offset by a major advantage of China's relative India: the world's first class infrastructure.

At the same time, the western countries threatened to anti-dumping on Chinese goods, causing some of the Multi-National Corporation's concerns. International famous manufacturing industry analysis company ManufacturingInsights Asia Pacific manufacturing research director NgBuckSeng said: "we found that the multinational manufacturing enterprises are more and more interested in India. This is because if they only have such a low cost base in China, the risk will not be small."

India is not the only bet on the manufacture of the country, Southeast Asia, Thailand, Vietnam, Kampuchea is also launched sprint. India's "short board" is the infrastructure construction, but has a unique great advantage: the huge domestic market for more than 1 billion people.

India wages are relatively low, factory workers starting salary of $2 a day. The minimum wage in different regions of Thailand is 3.5 to 4.5 U.S. dollars a day, with the shortage of skilled workers, the Chinese workers began to fight for the minimum wage of 4 to 8 U.S. dollars a day.

China will not be thrown down

But there will be no danger of being left behind by India in the short term. China's exports are several times higher than India's, and the gap between the two countries is still widening. 2005, India's export value of 8 billion U.S. dollars per month, China reached 63 billion U.S. dollars, manufactured goods are the two main export.

Experts believe that in the huge outsourcing manufacturing market, China and India will play their respective comparative advantages, respectively, occupy a different position. In toys, electric kettle and TVs low added value production areas, because in India is very difficult to establish to China on the scale of the factory, coupled with government policy restrictions, and cost of electricity in India is twice that of China and other factors, the field for India, beyond the reach of.

But in the huge middle - end manufacturing market, India can be a substitute for china. In the end of the manufacturing industry both need some skills, but also the need for cheap labor. India toys may fight China, but the phone is possible. Clothes racks, underwear has play. Synthetic fabric of the shoes can not, really shoes can.

Forward Toms shoes shoe company last year for European brands such as Clarks production of 100 million pairs of shoes, chief executive officer MuhammadYavarDhala very clever: priced below $60 shoes left Chinese shoemaker, higher than the $240 European shoemaker left.

India's government is more like a cheering squad.

A hand push China manufacturing rise is the government, and in India, the government is more like a cheerleader, instead of driving force. The contribution of the state government of Tamil Nadu leaders early in the Indian attention to infrastructure question a few years ago realized this problem. Madras harbor before the introduction of a private, to accelerate the transformation of the benign track, the power supply is also very stable. State of the state government to grasp the macro policy, in order to transfer the obstacles to political factors, promote trade: they set up special economic zones, allowing enterprises to calculate tariffs.

Another problem in India is frequent strikes. Many multinational companies said they would not consider investing in production in India before the introduction of more stringent labor laws. But some companies are clever to circumvent the law, not to participate in the labor union employees, and its impact on the. They have little chance to see the world and find the special experience of poor villagers, usually for women. They built a temple in the village, inviting families to join the company to pray.

In the Victoria's secret factory and more than 2600 women accounted for main employees every day by the 78 companies bus company received, rather than living in the dormitory or walk to work. They can also enjoy other luxury benefits: kindergarten, morning energy drinks, install air conditioning plant, and the boss of the factory can accept the delicious meal. Workers can also buy underwear at a discount price.

Federation of trade unions of India a senior responsible for ChittabrataMajumdar accused of "new factory" union busting behavior, he said: "if the workers to form unions, they will be fired." Some workers have even been asked to sign a statement when they are hired, promising not to join the union. But he also acknowledged that workers' interest in trade unions is one of the most difficult problems for India's trade unions, as many workers are happy to get a good job in a few years.

In the special economic zone, the international business managers have said that the barriers to entry before they have disappeared. "I don't understand people who say it's impossible," said JukkaLehtela, a Finland based operations manager at NOKIA. I can prove them wrong." NOKIA is operating its own special economic zone.

In Nokia's workshop, workers with ion guns will be subtle components that are assembled into the integrated circuit board on to produce a value of $60 phone. "I don't think there's anything to stop us from producing here," Lehtela said."

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