Page 70 - IMDR EBOOK 20 OCT 2020

"Pandemic and Beyond: Naviga ng the New Normal" E - Book Year 2020

9 Chinese Manufacturing Miracle: A perspective.

Introduction Prof. Dilip Ranadive - DES’s IMDR, Pune

The original topic was related to cost & quality of consumer products made in China.
While gathering information on the topic, it was realised that, it is much more important
and interesting to understand how China has reached the position of industrial and
manufacturing giant on whom the entire world has dependence in some way or the other.

From mobile battery to Refrigerator in our house, China touches our daily lives in some
way or the other. 80% of the ACs world over are manufactured in China, 70% of the
mobiles are made there, 60% of the shoes we wear are basically Chinese, 60% of the
cement, 50% of coal, 50% of steel being used on earth, 70% of toys, 50% of apples the
world eats come from China. How did China pulled 80 crore people out of the poverty line
in 30 years and in India there are still 17.5 crore poor. How the rural industrial units
manufacturing consumer goods could achieve a phenomenal growth rate of 28% year on
year consistently? These gures make one curious about how they have reached this
stage in just about 4 decades. Particularly so when as a country we are aspiring to take
advantage of the Covid situation and attract maximum industries from the certain
exodus of foreign Companies out of China.
Objectives

The main objective of this study was to understand the how, what and why of China`s
ascend to becoming world`s manufacturing centre from the viewpoint of capturing
learnings from it for India to emulate this success.
Another objective was to know the reforms India needs to have in place to attract the
investments / manufacturing projects that are slated to exit China in post-Corona
period.
Methodology
The methodology included,

a. Study of information available on net.
b. Inputs from business executives who deal with Chinese companies and have
travelled to China with an insight to notice and learn from the situations
and surroundings.

c. Inputs from personal contacts with Chinese and European business contacts.
d. Periodicals and other published data.
e. Personal experience of dealing with Chinese companies during working days.

Contents
China arrived on the Global manufacturing scene with a threatening presence as late as
the 90s. Prior to that, manufacturing was a reserved domain of Japan, US and the elite
countries in Europe, namely Germany, UK and France. Japan had literally mesmerized
the whole world with their product quality and acquired a virtual leadership in designing
quality systems for the world to learn from and adopt. The whole world was in awe of
Japan and almost every major brand had surrendered to the Japanese way of
manufacturing. Came the decade of 90s and all this changed rapidly. China had arrived.

In fact, by mid 80s, China and India were equally poised to take the economical leap.
Both countries had comparable population, the unemployment rates were comparable,
both had strong agrarian based economy and a few more similarities. GDP of both
countries in 1985 was in the close vicinity of $290. Rather miraculously, in a matter of
next three decades, China had managed to take this to $ 8827 whereas Indian GDP
around 2017 hovered around just $1942. These gures were published by World Bank
in 2019.

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