Just as it was predicted a long time ago that China would become India's biggest competitor in the field of software outsourcing, it was also predicted that "Made in India" would be the biggest threat to "Made in China". However, this paper threat is not easy to become a reality. Although India, like China, has a huge low-income population, it has not been transformed into an effective low-cost manufacturing workforce. The reasons include its backward infrastructure, the legacy of social caste system, and the lack of a coherent foreign investment strategy by the government. In my opinion, perhaps the most important reason is that there is no "overseas" region like China, Hongkong and Taiwan Province Province in the take-off stage of Indian manufacturing, which can import the capital and professional knowledge needed by Indian manufacturing.
However, these advantages of China may be gradually losing. I'm afraid the capital inflow into Taiwan Province Province and Hong Kong has peaked, and I won't be surprised if there is a large-scale reverse capital flow from the mainland to Taiwan Province Province and Hong Kong. Although China is still far ahead of India in infrastructure construction, India has passed the lowest threshold of infrastructure construction with its rapid economic growth in the past 20 years. Politics is becoming more and more stable, and the influence of caste system on the younger generation in India has been quite weak. One factor that is most likely to be unfavorable to China is the demographic structure.
At present, young people under the age of 30 in India account for more than 40% of the total population; However, due to China's long-term implementation of the family planning policy, the proportion of people aged 18-40 who are suitable for manufacturing employment in the total population has dropped significantly, and the proportion of elderly people over 60 years old has reached 10% and is rising continuously. Some international media even described this phenomenon as "young Indian, China in the twilight". Although this remark is very unfriendly to China people, it makes us face this realistic constraint sharply: If our labor advantage is gradually lost, can China's manufacturing industry continue to maintain its export strength? Will "Made in China" be replaced by "Made in India"? India has been ahead of China in services such as finance and software, and its industrial structure is superior to that of China. More than half of GDP comes from the service industry. What would China do if Indians were allowed to catch up with us in manufacturing?
Of course, even if we lose our labor advantage, China Manufacturing may have the following outlets: First, establish brand awareness. Made in China is preconceived in the world and has a certain brand effect on the whole. If on this basis, a widely recognized brand can be formed for specific products and a loyal user group can be established, then it will be difficult for latecomers to seize market share. In the software industry, Indian enterprises are the current leaders and have a high brand reputation in the European and American markets, which makes it difficult for China enterprises trying to share a piece of the action. In manufacturing, we may be able to make Indians suffer the same pain in turn. However, "Made in China" has always taken the road of OEM, and there are not many independent brands. China's famous enterprises in the world are basically state-owned enterprises, which are famous for their large scale. There are few examples of establishing international brand awareness by market means, and compared with Indians, China people really lack experience in this field.
The second is to achieve the "lock-in effect" through industrial division of labor, so that even if there is no strong brand, the international market will rely on "Made in China" by mastering specialized knowledge and skills. However, at present, China is in a passive position in the international industrial division. The so-called "Made in China", the key professional knowledge and skills are often not in the hands of China people, and the industrial lock-in effect is limited. If we want to change from passive to active in industrial division of labor, we must rely on strong capital market ability, through the infiltration of upstream and downstream capital and the merger and acquisition of professional knowledge and skills. It is in terms of capital market capability that China is recognized as lagging behind India.
The reform of China's financial system lags behind the reform of general enterprise system, and the financial industry is underdeveloped relative to the manufacturing industry, which will make it difficult for China to realize its dream of striving for initiative in international industrial division.
The third way, of course, is to strengthen independent innovation and enhance the invincible ability of manufacturing industry. This road is in line with China's established development strategy, and China's R&D strength and patent forming ability are stronger than Indian's. However, R&D strength may not be transformed into the competitiveness of manufacturing industry. The underdeveloped financial system will be a constraint, and another more serious constraint is the general lack of intellectual property awareness in China. In many people's minds, infringing on foreigners' intellectual property rights is even a patriotic act. The problem is that once infringement becomes a habit, it is rarely true to distinguish between domestic and foreign countries.
A philosopher once said: The most obvious way to solve a problem is to solve the problem itself. Perhaps the answer is not how to maintain the dominant position of "Made in China", but how to get rid of our country's one-sided dependence on "Made in China". Perhaps, China's economy, population structure, ecological environment and international role have all entered a new stage, and continuing to play the role of "world factory" will not be good for China's domestic welfare or international reputation. Perhaps, instead of competing with Indians on the level of $3,000 cars, we should try to make money in other ways and let Indians produce cars for us. However, in order to achieve this goal, China's economic system and concept need to be further reformed. In this regard, I am afraid that the Indians have unfortunately quietly walked in front of us.