|Author: Kailash Kumar 03 Aug 2016 Member Level: Platinum Points : 3 (Rs 3) Voting Score: 0|
The net cost of production in China is generally less than India due to several reasons. Because of the huge population of the China which is even more than India, the labor force is easily available . Moreover, it is said that in the China the productivity is much more compared to India. Generally, the manufacturers pay wages to the labor on the basis of their net productivity instead of employing them on a monthly salary basis irrespective of the net output. They provide a place to the labor force to reside within the factory premises so that they can work maximum possible time without wasting time in commuting to the workplace daily in the morning and evening. In this manner, it is possible for the workers to work for even up to 16 to 18 hours in a day and earn their wages also accordingly.
|Author: Venkiteswaran. 04 Aug 2016 Member Level: Diamond Points : 3 (Rs 3) Voting Score: 0|
Labour cost is less than that of India. It is also said that Chinese labourers work under compelling conditions and had to 'comply' to very strict norms and have less freedom in comparison to that of Indian trade unions etc. It is a country with a single party system of rule. The earlier compulsory one-child norm made family expenses of a labourer relatively lesser than that of an Indian counterpart.
Due to the lesser manufacturing cost and as finding new areas of investment, many large manufacturing companies started functioning from China. Once a basic infrastructure of industries gets set in many other ancillary industries also enter the place. This gives a cascading effect.
All these contribute to the lesser manufacturing cost of Chinese products.
|Author: Timmappa Kamat 04 Aug 2016 Member Level: Gold Points : 3 (Rs 3) Voting Score: 0|
There are several reasons for the low cost of Chinese products. A few of them can be outlined as below.
1. The wages are considerably low in China. There is an assumption that the salaries are high in China, but that is actually a myth. Salaries could be high in some sectors, but the manufacturing sector is quite low paid.
2. Labours are paid on per piece basis rather than employing them on a fixed salary. That makes them more productive.
3. Transportation costs are quite lesser. The public transportation is quite reliable in China. Indian manufacturers depend on private transportation that adds to the cost of a product.
|Author: Mahesh 04 Aug 2016 Member Level: Gold Points : 4 (Rs 4) Voting Score: 0|
There are many reasons why the Chinese products are cheaper in cost. One of the most ignored reason being the resources in china are more in numbers compared to other countries. And the resources extraction using labor is more cheaper in china. The processing, recycling and the innovation is less costly. Also the adaption to the change is also good. Almost every business thrives in china due to the entrepreneur mentality of the people.
In India, people have red tape or some sort of legal process and documentation for everything they do. And also the type of business being encouraged in this country are relatively low. People also can't work for the low cost like china. And this creates a big gap in pricing in between the india and china.
Government and the economics also plays part. The country being governed under communism with less rights for people on some places. I think it is hard to compete with them on prices.