Chinese Media Warns Beijing Of India's Takeover As World's Manufacturing Hub

Beijing: Apple expanding its business in India could have other tech giants follow suit and threaten China's position as the manufacturing powerhouse, Chinese state media said today, adding that Beijing will have to upgrade its manufacturing to further attract offshore production.
"Apple's possible supply chain transfer to the South Asian country adds further pressure on China as its domestic manufacturers show a growing interest in offshore production to low-cost countries," the state-run Global Times said.

Even as US President-elect Donald Trump pledges to bring manufacturing jobs back to the US, China's competitors seem to be further expanding their businesses offshore. An Apple manufacturing partner is working to build an assembly facility in India, the article said.
"Whether India is ready to embrace the supply chain transfer and replicate China's success as a manufacturing powerhouse is another story. But the evolving landscape highlights the need for China to design a strategy to retain manufacturing jobs and upgrade its manufacturing industry to maintain competitiveness," it said.

Apple's three major assemblers - Foxconn Technology Group, Pegatron Corp. and Wistron Corp - are all Taiwanese and any one could be willing to set up India operations.

Despite Apple's bumpy journey to expand operations in India when its application to open stores was rejected because at least 30 percent of mobile parts production was not localised, an opportunity seems to have opened up as senior Indian officials have softened their stance, it said.

Apple's three major assemblers - Foxconn Technology Group, Pegatron Corp. and Wistron Corp - are all Taiwanese and any one could be willing to set up India operations.

If Apple decides to set up assembly facilities in India, more global tech giants may follow suit and China is likely to see a further transfer of the supply chain given India's abundant supply of working-age labourers and low labour costs.

"And it won't be difficult for Wistron to make a large investment or generate jobs. Apple's partner Foxconn has displayed the potential for job creation in India," it said, adding,

The article said that China can't afford to lose manufacturing jobs while it has not made a major breakthrough in upgrading its industry. It also warned Beijing of Donald Trump's plans to draw manufacturing jobs back to the US.

It however said China's skilled labour was its edge over India.
"Industrial competition between China and India comes down to the labour force, where costs and the level of skills are two major factors that influence business decisions. Although China has an edge having nurtured skilled workers over past decades, a majority of Indian states have an absolute labour cost advantage over China," it said.

Advising China to scale up its manufacturing, the article said it should upgrade through restructuring and reorganisation of technologies, talents, capital and other resources. (Source)