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'Secret behind Chinese products is skilled workforce, sops'

world Updated: Apr 11, 2010 15:14 IST
K J Verma
Highlight Story

The success of cheap Chinese products owes it to the disciplined, educated workforce and subsidies to the small and medium enterprises, contrary to what many in India believe, said a report.

"Most of the Indian politicians and businessmen find it convenient to believe that China’s miracle was possible just because of its Communist monolithic governance that denied the individuals workers their rights and freedom of speech," a study conducted by a research group headed by P S Deodhar, President of the India-China Economic and Cultural Council said.

The secret of China selling its goods at unbelievably cheap rates is the combination of factors like "remarkably well-disciplined and well educated work force, high quality infrastructure, supply chain clusters, visible and hidden government subsidies, undervalued currency and copious flow of foreign direct investment (FDI), the study said.

Chinese SMEs account for 99.90 per cent of the total enterprises, which also accounted for 75 per cent of the total labour force and contributes 68 per cent of the country’s exports, according to the report.

China’s export growth is double the GDP expansion. The country has created more SMEs in the past 20 years than the total number of SMEs in EU and US put together, the study supported, among others, by the Rajiv Gandhi Institute of Contemporary Studies said.

The first reason for the success was the workforce, which was primarily constituted of migrants from rural areas, surrounding the industrial zones.

"All these youngsters from rural areas in China may not know English, but each fully literate and well informed" after 11 years of schooling and vocational education, the study, which surveyed 300 Chinese SMEs, said.