Using the resources of developing countries to decrease production costs is a growing trend in businesses of all sizes. Large corporations have been moving manufacturing operations overseas for decades, and small businesses now have the same opportunity through the use of instant communication. The two largest countries for outsourced labor are China and India. Both countries have large populations and low-cost labor opportunities.Many companies outsource customer service and other mid-level operations to India, due to the high numbers of English-speaking job seekers, however, China reigns supreme in manufacturing, due to its long-time investment in industrialization. In recent years, India has also attempted to break into the manufacturing market to employ a higher percentage of the population.
Moving production overseas gives businesses a lower expense line on the production of goods. Labor in both India and China is less expensive, since both countries have excess population and fewer jobs. The currency exchange rate also works in favor of domestic businesses. The dollar compares very favorably to both the yuan and the rupee. In China’s case, this is deliberate, with the government working to keep the exchange rate low to continue to provide incentive to borderless businesses.
When looking at both of the world’s largest population centers for manufacturing opportunities, China stands above the competition. India has a comparable labor pool, but the infrastructure is only in the beginning stages. In China, manufacturing plants are well-established, with the latest technology available. The government stands behind industry to such a degree that it offers subsidies to companies which employ more than a set number of workers.China is the single largest exporter worldwide, with a vast number of different plants, producing a wide array of products. Everything from food to high-end technology comes from Chinese factories. In the technology sector alone, top companies like Hewlett-Packard, Apple, Sony, Microsoft and Amazon, among others, use Chinese factories for their consumer products.
If the top companies are choosing China, there must be a reason. Even India chooses Chinese manufacturers. When looking at the comparative import numbers, India imports $43.5 billion dollars worth of Chinese products each year. China imports less than $20 billion in products from India. So it would seem that India has recognized the superiority of Chinese manufacturing.
Chinese factories have taken the traditional manufacturing plant to an ideal efficiency. The many years China has invested in becoming the world’s leading manufacturer show in its operations. Waste is minimal, and the surrounding infrastructure to move finished products is advanced. India is working to build similar systems, but in a country where the road network is incomplete, it could be quite a while before it can compete with China. In China, goods go from factory to delivery swiftly and with little interruption.
Choosing a partner for the manufacture of products is a big decision. Many factors come into play, and pricing is only a part of the bigger picture. When choosing an import partner, China offers both the lowest prices and the most efficient service, making the decision an easy one. Choose the country with an established record of high-quality production, trusted by some of the world’s largest corporations.
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