China needs a manufacturing upgrade to compete with India
Advertisement
The Chinese official media recently said that China needs to improve its manufacturing as there has been a rising competition from India which with its labour advantage is attracting multinationals like Apple .
US President-electDonald Trump has also pledged to bring manufacturing jobs back to the US, China’s competition has increased exponentially and now Apple manufacturing partner is working to build an assembly facility in India, an article in the state-run Global Times said today.
"Apple's possible supply chain transfer to the South Asian country adds further pressure on China as its domestic manufacturers show a growing interest in offshore production to low-cost countries," it said.
"Whether India is ready to embrace the supply chain transfer and replicate China's success as a manufacturing powerhouse is another story. But the evolving landscape highlights the need for China to design a strategy to retain manufacturing jobs and upgrade its manufacturing industry to maintain competitiveness," it said.
Regardless of the rough journey of Apple to expand in India when its application to open stores was rejected because at least 30 per cent of mobile parts production was not localised, an opportunity seems to have opened up as senior Indian officials have softened their stance, it said.
"And it won't be difficult for Wistron to make a large investment or generate jobs. Apple's partner Foxconn has displayed the potential for job creation in India. If Apple expands in India, more global tech giants may follow suit and China is likely to see a further transfer of the supply chain given India's abundant supply of working-age labourers and low labour costs. China cannot afford to lose manufacturing jobs while it has not made a major breakthrough in upgrading its industry and while Trump plans to draw manufacturing jobs back home," it said.
"Industrial competition between China and India comes down to the labour force, where costs and the level of skills are two major factors that influence business decisions. Although China has an edge having nurtured skilled workers over past decades, a majority of Indian states have an absolute labour cost advantage over China. The situation requires China to seriously consider how to plug in the hole if manufacturers continue to move elsewhere," it added
The country should also speed up its manufacturing upgrade through restructuring and reorganisation of technologies, talents, capital and other resources," it said, adding that these options could create investment opportunities and generate jobs.
Advertisement
US President-elect
"Apple's possible supply chain transfer to the South Asian country adds further pressure on China as its domestic manufacturers show a growing interest in offshore production to low-cost countries," it said.
"Whether India is ready to embrace the supply chain transfer and replicate China's success as a manufacturing powerhouse is another story. But the evolving landscape highlights the need for China to design a strategy to retain manufacturing jobs and upgrade its manufacturing industry to maintain competitiveness," it said.
Regardless of the rough journey of Apple to expand in India when its application to open stores was rejected because at least 30 per cent of mobile parts production was not localised, an opportunity seems to have opened up as senior Indian officials have softened their stance, it said.
Advertisement
"Industrial competition between China and India comes down to the labour force, where costs and the level of skills are two major factors that influence business decisions. Although China has an edge having nurtured skilled workers over past decades, a majority of Indian states have an absolute labour cost advantage over China. The situation requires China to seriously consider how to plug in the hole if manufacturers continue to move elsewhere," it added
The country should also speed up its manufacturing upgrade through restructuring and reorganisation of technologies, talents, capital and other resources," it said, adding that these options could create investment opportunities and generate jobs.
Advertisement
- I quit McKinsey after 1.5 years. I was making over $200k but my mental health was shattered.
- Some Tesla factory workers realized they were laid off when security scanned their badges and sent them back on shuttles, sources say
- I tutor the children of some of Dubai's richest people. One of them paid me $3,000 to do his homework.
- Why are so many elite coaches moving to Western countries?
- Global GDP to face a 19% decline by 2050 due to climate change, study projects
- 5 things to keep in mind before taking a personal loan
- Markets face heavy fluctuations; settle lower taking downtrend to 4th day
- Move over Bollywood, audio shows are starting to enter the coveted ‘100 Crores Club’