Tuesday, October 14, 2008

China's Role In the Global Economy.

In the last two decades globalisation has taken it's proper shape. Interestingly China's role has made the whole management world to rethink about the success that China has made in the manufacturing sectors. The cost effectiveness has prompted the Western conglomerates to shift manufacturing bases to China, in order to remain competitive in the global market.China's role in the BRIC economic block is significant and working as growth engine in the world economy.

There are many questions which comes to my mind regarding the super economic success and sustainable model of China's success.It's the china's central govt policies and its manpower planning and development has helped the economy to grow faster, but the main question still lies how it has motivated it's labor at such cheap price to remain competitive.

1. How can China turn around so fast into a world class manufacturing hub from a closed and command economy?

2. How can be the cost is so competitive by Global standard?

3. How can China motivates its workforce in SEZ, at such low cost, is it by stick or by carrot.

4. The basic principal of Economics is “Capital formation can only be possible through cheap work force"; it has become the manufacturing base of the western conglomerate because of international labor arbitrage market. How long it will be possible to maintain this phenomenon.?

5. Talk about Cisco which is outsourcing its routers from china , but many Chinese manufactured brands in the router segments like Huwai, Maipu ,are coming up very fast and doing brand positioning in the Global market. Which can be threat to many global MNC brands that are getting the contract manufacturing from them? Replicating a business success is not big issues. IBM checked out from PC business and Lenevo (Previously contract manufacturer for IBM) and has positioned its brand in the global market. Don’t you think Western MNCs will be in deep trouble, contract manufacturing, outsourcing can back fire? South Korea Brands like Samsung, LG, etc are giving tremendous fight to U.S and EEU brands.

6. The China is not only in manufacturing hub of the world, they are learning English and by 2012; many of the BPO and KPO jobs can shift from India to China. Soon it will be the service hub of the world and a stiff competitor for its neighboring India. Will it be really possible to be another cheap service hub of the world, next to India?

7. How meticulously they have reaped the demographic dividend, the quality and disciplined human capital has given them the huge dividend, transforming ordinary human capital to a productive and knowledge based human capital within a very short period of time. How this has been possible?

8. How China is maintaining and developing the SEZ, its land acquiring , developments in the infrastructures like roads, telecoms , housing of SEZ. Making SEZ and providing all the infrastructures for investors or contract manufacturing is also important and the central government must have worked proactively and have helped to make these SEZs, viable and productive.


Jimmy said...

Good post. Debashish.
Your questions about China are very thoughtful. I would love to discuss with you about this topic. I am business development director at BPOVIA, which is a leading virtual assistant and knowledge process outsourcing (KPO) service provider in China. BPOVIA is the only virtual assistant company ever been nominated for the prestigious "Red Herring 100 Asia" Awards 2008.

Director of Business Development

Debashish Bramha said...

Dear Jimmy, Most welcome, my mail Id is debashish.bramha@gmail.com
Thanks & Regards,