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Make in India: What’s China Doing.

This festival season like any other year also witnessed Indian towns and cities swarmed with Chinese products like crackers, lights and they were the grim reminders of how Made-in-China still dominated our offices and homes despite Prime Minister Narendra Modi’s emphasis on “Make in India” policy.
Interestingly, China also launched a “Made in China” campaign, coinciding with India’s campaign, seeking to retain its manufacturing prowess. Under the new campaign, China would use tax breaks to encourage enterprises to upgrade their equipment and increase research and development efforts to improve the manufacturing industry. China’s new move aims to prompt technical improvement of companies, especially innovation of small and medium-sized enterprises, which in the last three decades propelled it to become world’s second largest economy and made it a powerhouse of the manufacturing industry. The Chinese government decided to implement the new measures to arm “Made in China” with advanced technology and equipment, encouraging more competitive products with high added value.

Analysts believe the measures adopted by China will not only start a new round of innovation but also spur fixed asset investment, and in the bigger picture contribute to stabilizing China’s economic growth. Chinese works on the strategy of mass production and mass consumption. Main reason of their low cost is the low capital investment and export friendly policies of the Government in China.

However, India need not to worry:

A new index of manufacturing costs, including productivity-adjusted wages, electricity, natural gas and currency movements, created by the Boston Consulting Group (BCG) of the world’s 25 biggest exporters shows China’s traditional cost advantage is now under pressure denting its attractiveness. Under pressure from the U.S., China has had to appreciate its currency by 30 per cent since 2006, which is eroding its exports’ cost competitiveness.

Besides, the cost competitiveness, India boasts a nearly 500-million-strong labor force comprising skilled workers as well as English-speaking scientists, researcher and engineers, undoubtedly making it a potential destination for cost-effective research and development-oriented manufacturing.

In a nutshell, India should take the road less traveled if it wants to make the difference and can thus create a deeper impact across the globe with its new found “Make in India” initiative.


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