Manufacturing In India And China


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Manufacturing In India And China

  1. 1. Introduction The growing manufacturing sectors of India and China have attracted much interest in recent years. The large changes in the growth dynamics of the economies of India and china during the past two decades have led to a flood of literature on the competitiveness of the two economies in international and comparative perspective. Comparison of the basic statistical material on international comparisons of hourly compensation costs, labor force, employment and unemployment rates, and consumer prices between the two economies are of great importance to the business sector.
  2. 2. Manufacturing In India
  3. 3. India is largely moving toward high-end manufacturing Industry. India’s manufacturing sector is a crucial cog in the wheel of the economic progress. It’s contribution to Gross Domestic Product (GDP) being 16%. Post 1990 economic liberalization era, India has well realized the importance of manufacturing for the overall industrial development.
  4. 4. Compensation Cost     Compensation costs for India are not directly comparable with the data of the other countries. The following aspects of India sources data that limit comparability with estimates of compensation in other countries: Data Treatment Organized Vs. Unorganized Sector Contract Labor Hours
  5. 5. Sector Level Compensation And Employment Hourly Compensation Cost:
  6. 6. Employment Employment of non-production and directly employed production workers has been growing since 2004 which is one of the underlying reasons for the increasing gap between production and non-production worker compensation.
  7. 7. Industry-level Compensation and Employment Hourly Compensation Cost: In 2010,compensation for industries in the top quartile was on average about three times the compensation for industries in the bottom quartile. Coke and petroleum products are among the highest paid industries while wood, leather, textiles and apparel products are among the least paid.
  8. 8. In India, nearly 40 percent of organized manufacturing sector employees are in the low paying food, beverage, and tobacco and the textiles, leather, and apparel industries.
  9. 9. Manufacturing In China
  10. 10. China has become one of the United States primary trading partners in manufactured goods. The Chinese manufacturing industry is a highly important industrial sector in China, producing 44.1% of GDP in 2004 and accounting for 11.3% of total employment in 2006. The six predominant industries in the manufacturing industry in china are petrochemicals, metallurgy, forestry, medicine, food and machinery. However the electronics industry, medicine and the food segments have recently been rapidly gaining popularity. China is also the world’s biggest sex toy producer, with 70% of the worldwide sex toys production, generating about two billion dollars a year.
  11. 11. Legal Aspects In China’s Manufacturing Industry There are few laws which governs the manufacturing industry of china. These are: • Clean Production Law • Safe Production Law • Manufacturing Contracts For Foreign Countries
  12. 12. Employment China’s manufacturing employment continued to grow from a total of 97.91 million at the end of 2007 to 99.01 million at the end of 2008. Data for formal, urban enterprises are collected and reported by the Ministry of Human Resources and Social Security, while data for other manufacturing units- that is, town and village enterprise (TVE) data- are compiled and reported by the Ministry of Agriculture.
  13. 13. Comparison Between India And China
  14. 14. Factors Leading To India’s Growth In Manufacturing • • • • • • Hourly Compensation Cost Preferential Government Policy Social Insurance Costs Human Capital Large Domestic Market Quality And Trade Standards
  15. 15. Factors Slowing India’s Growth In Manufacturing • Lower Level of Foreign Investment than China • Restrictive Labor Laws
  16. 16. Conclusion • Comparison between India and China with respect to the manufacturing industry is very difficult due to widespread unorganized sectors. • India’s manufacturing industry is extremely low cost as compared to rest of the world • Hourly compensation rates in China are lower than most of other countries. • India is more feasible for manufacturing than China. • India has lesser Foreign Direct Investment as compared to what China has.