China'S Manufacturing Costs Rise, India "Sniff" Opportunities To Find Business Opportunities

At present, China is still the most popular investment destination in the world, followed by India, according to a survey released by the four largest accounting firms in the world.

While the cost of China's traditional light manufacturing industry has increased rapidly, India's manufacturing industry is growing at a two digit rate.

Statistics show that in the first quarter of last year, the growth rate of India's manufacturing industry reached a record high of 10 years, 11.2%%.

Although the scale of traditional light industry is lagging behind China, the growth rate of India's manufacturing exports is higher than that of China.

Low cost manufacturing in India has become an ideal candidate for the pfer of traditional labor-intensive industries.

20 years ago, wages in India and Southeast Asian countries were generally higher than those in China. Now, the average monthly wages of ordinary industrial workers in the southeastern coastal areas of China are 250 - 350 dollars, while in India only 100 - 200 dollars.

Since the second half of 2006, the prices of production factors such as raw materials, energy, labor and land have risen sharply, and the profits of China's traditional light manufacturing industry have been continuously compressed.

At the same time, in recent years, India has also stepped up its adjustment of industrial structure. The focus of economic development has shifted from service industry to manufacturing industry. More than 2/3 of foreign investment has entered India's manufacturing industry.

Despite the fact that only 7%%'s multinational companies have set up factories in India, 18%%'s large enterprises are willing to enter India in the next 3 to 5 years, which is comparable to the foreign companies currently stationed in China.

In these enterprises, there is no shortage of traditional labor intensive industries.

After the recent financial crisis in Vietnam, those who want to invest in China or increase capital will be implicated in this. They will become more inclined to India. Some international buyers will also abandon their purchases in China and turn to India.

And domestic shoemaking, toys, electronics, clothing and other enterprises as early as two years ago have tried to move some of the production links to India, even though the well-known shoe enterprises like AOKANG also said that the India market and China's development over the past few years were relatively close and stable, and the company's expansion in India was proceeding in an orderly way.

On the occasion of the "global resource gift and household products and infant and children products procurement fair" held recently, a India businessman said with pride, "a German buyer is going to abandon a Chinese supplier to buy our products."

The India businessman is responsible for a company that produces glassware and handicrafts.

He believes that the products made in India have a considerable price advantage compared with Chinese suppliers. "The rising price of Chinese manufacturing costs is an opportunity for India".

This is not a word of mouth.

At present, in the Pearl River Delta and the Yangtze River Delta, which are concentrated in the traditional light industry in China, with the increase of the national energy conservation and emission reduction policies and the implementation of the labor contract law, the environmental protection requirements of enterprises and the standards for enhancing the rights and interests of workers are stricter. The increase in investment and tax in foreign-funded enterprises is increasing, and the recent international oil prices are climbing steadily. All these factors directly affect the development of China's traditional light manufacturing industry.

It is predicted that the sharp increase in raw materials and labor costs of these industries will deplete the profit margins of enterprises in 2 to 3 years.

This shows that the cost of China's traditional labor intensive manufacturing industry has entered a period of accelerated rise.

Data show that only in the Pearl River Delta region, thousands of traditional light manufacturing enterprises have gone bankrupt, and some enterprises have to migrate to inland China or Southeast Asia and India.

But it is undeniable that China is still the most valuable investment in the world.

Although India has ranked among the world's ten largest economies, its per capita national income is only 1/40 of the United States, and India's current power shortage is as high as 14%%.

The industry believes that in the long run, for China's traditional light manufacturing industry, it is not without worries.

Because under the international economic integration, many Chinese manufacturing enterprises, especially coastal enterprises, are only a manufacturing workshop or production base of multinational corporations, which seriously restricts the growth and development of Chinese enterprises.

Faced with the challenges made by India, if China's traditional light manufacturing industry can occupy the international market for a long time, it will only move to the industrial chain to acquire its own brand and R & D capability, which will be more difficult than any industrial upgrading.