Page 75 - IMDR EBOOK 20 OCT 2020

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

the current education are strongly discouraged.)

A common misnomer about Chinese workforce is that they are cheap. Nothing is farther
than the truth. As of January 20020, in Shanghai rate of labour per hour is 22 yuan
which is $3.19 and in Shenghen it is 20.3 Yuan which is $ 2.91. These by no account are
“cheap”. When the wages in China are so higher than those in India, how and why are
they considered “cheap”? The answer is they are not cheap but they are economical. This
is because the speed and accuracy of Chinese worker is remarkably higher than an
average Indian worker which makes their productivity higher than our workers. One has
to look at the “total cost of labour” including the productivity and not just the “per person
wage level”.

Chinese workers are not as suppressed a lot as they are thought to be. Every worker has
membership of ACFTU (All Chinese Federation of Trade Unions) which ensures that the
employers comply to minimum specied standards of employment terms specied by
government including overtime wages. Of course it being a government wing, usually
tows government line and the representative rights of workers are relatively low. Still, the
picture painted about the draconian conditions of Chinese workers is not entirely true.
Basic living conditions, good food and good saving is ensured to them. In many places,
wherever both husband and wife are working, their children below the school going age
are cared for by government institutions. China is by no means a welfare state but still in
some aspects they do such things which encourages the workforce.
World vision of Chinese private entrepreneurs constitute why and how the Chinese
people contributed to the whole phenomenon of making China the manufacturing giant.
(It needs to be stated that there is one Indian manufacturer who showed similar world
vision. Its Bharat Forge. Since last many years, they pursued their world-vision and
through constant upgradation and expansion are today world`s largest manufacturer of
forging products with signicant exports to China. However, this remains as one of the
few exceptions.)

The initial large industries were set up with Government owned factories but (rather
surprisingly) the real success of Chinese Economy is due to its own entrepreneurs.
Similar to India, Chinese people are born entrepreneurs. Once the shackles of socialistic
thinking against private ownership of 1950s to 1970s waned, the innate
entrepreneurship of Chinese people blossomed. Let us go back to our example of TV
manufacture. The big component factories were set up with Govt. investments. Initial
capital equipment required were imported from the west. Chinese people trained
themselves in maintenance of the equipment, became experts and then set up own
private factories to manufacture the capital equipment themselves. This had a multiplier
effect on the economy. Since the capital equipment were manufactured in China, the
capital cost to set up new component factories went down signicantly thereby making
the cost of manufacturing the components low, perhaps lowest in the world ! Chinese
Govt helped by making the capital required by the entrepreneur cheap by charging a
negligible interest rate!
These “supportive“ private enterprises are set up near the mother plant as a kind of
ancillary unit feeding to the mother plant. But these entrepreneur also developed “world
vision” and they started looking for export business ! Once Chinese exports had a good
content of ready to wear clothes. But not today. That business has gone to still cheap
labour manufacturing countries like Bangladesh. But the owners of these garment
export factories in Bangladesh are Chinese! They had World Vision to relocate but
sustain their business!
India has a lesson in this. The supportive industries in India have to have World Vision.
Let them start with their local mother industry but they have to concentrate on the world
market for their present product as well as associated products.
Another important angle of how people supported this phenomenon is through what can
be termed as “Technological Leaps through Academics and Industry.”

71