Published : Friday, 11 July, 2014 11:00 AM
How can we compete with China in manufacturing sector?
The competition in the global market has made many countries pull up their socks so that they do not get neglected when it comes to managing business. To be proficient in business one would have to be either a formidable dealer or should manage a prudent manufacturing sector. India has been a part of Asia where the competition between the Asian countries is always dynamic. So it is essential that Indian market is well planned to be efficient in its business tactics.
India has been compared with China very often due to which it has become mandatory to compare the two in terms of their corporate strategies. China has however been calibrated to risen up in its manufacturing sector in the past few years. In spite of both countries being ruled by the British in the pat China gradually developed faster as compared to India as concluded by facts. But India too has certain points that can help it compete with the Chinese manufacturing industries.
China and India have grown relatively rapidly in recent years, and, in both, the importance of trade has risen substantially relative to GDP. Although both of these large, low-income countries had very low export-to-GDP ratios around 1980, when the process of reform was beginning in China (Srinivasan2004), since then both have increased their exports sharply, although India’s export growth has been much more modest than China’s.
From the mid-1990s, as the export processing arrangements were broadened beyond the initial special economic zones in China,3 the share of exports in China’s GDP began to climb sharply. With the sharp devaluation of the official exchange rate in 1994, the share of exports in GDP rose, but then stabilized or declined in the mid-1990s.
From 2001 to 2004, China’s export share rose dramatically, to around 40%, over two and a half times India’s export share. Even the upward revision to GDP of 17 percent in 2004 (see World Bank Office, Beijing 2006) leaves China’s export share at 31%, more than double India’s level.
Global Communication Benefits
One thing that Indians are considered good at as compared to Chinese is in terms of communication. Despite English being chosen as a global language the Chinese have always preferred their Mother tongue as a priority due to which the percentage of people who speak English in their country is low. This gives India an advantage over them to get their manufacturing sector more fruitful. India has low raw materials as compared to China but with proficient communication potential, India can negotiate for better prices on raw materials giving those benefits in their manufacturing industries.
Quality over quantity
Everyone is aware of the huge quantity of manufacturing that China does. But the quantity leads to loss of quality which makes their products unreliable. So, India can put emphasis on the quality sector so that they can have higher standards in their manufacturing sectors. If India is able to provide reliability in their products then their product’s demand in the global market can be increased.
Impact of Government
India’s performance in the manufacturing sector gets affected due to involvement of Government inefficiently. The government if provide sustainable conditions of living to the labor then there can be increase in the overall performance of the labor. So the Indian government would have to play a major role in making the conditions for the labor healthy and blissful.
Focusing on the government industrial sector
It is not just the private sector that has to be relied upon for manufacturing. The government sector should also increase their production in the various areas with more efficiency. Standards of the products have to be increased so that they can be used by people all around the world with satisfaction. China has focused on their governments industries more which made the development more fruitful. If India also follows a step like this it might have better results in the sections to compete with China.