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Hedging China Manufacturing Through India Just Became Corporate Strategy

Jun. 26 – The regrettable – and somewhat absurd – instance a few days ago of Chinese workers demanding to be fired in order to gain compensation payments has gained traction around the world. However, while the unofficial hostage taking of the American manager may be shocking, the underlying trend is not that of Chinese worker discontent. The underlying trend is what sparked the situation in the first place – the U.S. manufacturer uprooting part of its China plant and relocating it to Mumbai, India.

When I first ventured Dezan Shira & Associates out of China some seven years ago, I got not a little flack over it alongside accusations of stupidity. China was doing just fine, and order books were full. Yet, when making executive decisions concerning the firm’s development strategy, I have always kept an eye on the demographics. It was obvious at the time (Chinese officials even said so) that China’s worker demographic of young, inexpensive labor, was drawing to a close. While India’s infrastructure was, and still is, nowhere close to that of China’s, the country did possess the one thing that China was starting to run out of – an up-and-coming available young workforce.

This article was originally published by China Briefing. You can read the rest of the article here.

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