lol``your logic on economy is extremly laughable, you better educate yourself on this matter. brands setting up production line is because of cheap labour?? lol so by your logic all the brands should moving to africa and india, since they are way much cheapter than chinese labour. technological know-how isnt something you can trian the local within short period of time```it takes good quality primary education, higher education and skilling trainings.
its like if you gave advanced mathematic exam answers to a pilpul, he/she wouldnt even find the questions to those answers respectively. Whenever a well established brand trying to outsource production, cost is one of the factors but also other factors need to be taken in consideration, for example, the infrastructure, the labour market flexibility, higher education systems and skill training cost, and the technology readiness.
developed economies tend to have very flexible labour as they went through good primary and higher education stages and the sociaty can also provide sophisticated skill training programs. but most africa countries and also india's labour market is very unflexible and the training provided in those countries are low (according to 2010 nation competitiveness report, it categorised india as primative factor-driven economy still one step away from efficiency-driven economy like China and 3 steps away from innovation-driven economy like U.S)
so your point of brands moving to china are because of its cheap labour are absolutely ground less and shows your are very ignorant in terms of basic economcial principles and lack of common sense`
and also you brought political aganda into almost every single argument which makes all your points lack of creditability```
Very well analised!
And I’d like to expand a bit along your line.
Labour cost is relatively trivial compared to the total cost as you correctly said.
There’re other more important factors as well that China possesses
almost uniquely, vis-a-vis say the otehr 1 billion populace country India, with overwelming advantages such as :
(i)
Labour education, average IQ, average character traits such as diligence, discipline (work ethics), attitudes/ self-motivation, etc. – decided by the
culture and its underlying
group genetics . These factors enable faster & better skill training on top of flexibility , better product quality control, and faster shift / ramp up of production lines to higher and/or similar/unsimilar product lines should the need arises when the market conditions call for, etc... by and large overall manufacturing process management (AND its underlying
Opportunity Cost reflected by
varies very valuable Options available to the manufacterer).
(ii) An equally important , or perhaps even much more important, factor is the location of the
entire Product Value Chain : from availability of raw materials, sub contractors, govt policy/incentive (tax , accounting rules, redtapes , etc), infrastructures, energy security, transportation availability/ variety & relative costs, locations of corresponding product R&D and marketing/sales centres, degrees of sophistication of respective logistics operations along with wholesale & retail sectors, the size of the local market, proximity to existing end consumers and future potential market/s, ( the value chain) locations of direct competitors, etc, etc.
Take Sony as an example, most of Sony’s subcontractors are independent Chinese factories – there is
a big chunk of Made-in-China actually
inside almost any Sony product , even though the products themselves as a whole might be marked as Made-in-Japan.
Why Sony has to set up a shop in China, instead of Africa or India where labour costs are much cheaper? It is mainly because China can offer Sony
entire value chain – e.g. it is reported that Sony has contracted close to 3,000 Chinese factories as subcontractors and most of them are located within a single province of China! Other factors aside, just imagine the cost effectiveness / overall efficiency that alone is to Sony. It is simply mind boggling when I knew this !
( It would be interesting to know how many of those do some subcontracting jobs for J-20. And no wonder that the sheer manufacturing quality of J -20, as this prototype shows, is obviously a league ahead of T-50)
And a big part of Sony’s product
will be sold eventually in China apart from re-export to the North America and Europe.
That’s why it’s almost impossible for Sony to set up any significant factory in India however lower is the labour cost there, and likewise for most other Fortune 500 companies.
This is why Russia is already lagging ( far ? ) behind in electronics sector.
This is also why China is becoming so powerful on world stage that NO WAY India could dream to catch up with in BOTH quantity AND quality, not even remotely close.
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