Attributes of Chinese Electronics

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Chinese electronic goods have already captured world over market because they are customer friendly not only due to their cost but they are also handy and robust.  Everyone wants to know the attributes of Chinese electronic industry which have made it so developed that almost all day-to-day electronic devices from china have captured the markets all over the world. The research on fundamentals of electronics may not be a strong part of Chinese electronic industry but designing and fabrication of every day electronic appliances have gone to great levels even at the country’s smallest industrial levels. The basic thing we need to understand is the Chinese electronics is more of a assembly and production of electronic devices rather than doing actual research on electronic devices. China has always been a manufacturing hub. They have a production manual which they just need to follow it to the book and the manufacturing process with following attributes. These are the main reasons why china has been able to dominate most of the electronics industry.

  • Large cheap work force
  • Cheap fabrication facilities
  • Workers doing repetitive work for long hours
  • Favorable Government policies
  • Low quality high volume
  • Focus on industrial development
  • Good export policies
  • Finally they have low taxes and sometimes nod-and-a-wink corruption regarding enforcement of laws, tariffs, inspections, etc.
  • Possible to get good workmanship and compliance

It is not that China has large electronics facilities but Chinese people have power to repeat things correctly thousands of times. China is ahead in electronics manufacturing eco system because they have decided to boost themselves in this industry 30 or 40 years ago when their supreme leadership decided to make every village as the epicentre of electronics manufacturing by proposing to lower heavily the taxes to company setting up there and by helping with subsidiary to develop this industry. China looks at the volume and follow the huge volume; low profit business model, and hence to get orders they haggle prices to any extent. Considering the cost involved in being imported, logistics cost, profit margins and rational thinking; Chinese electronic goods are still cheaper. Hence most market looks at the cost and ends up buying imported Chinese goods. In a world where thousands of electronic devices are launched every year and their upgrade versions are scheduled months apart, Chinese manufacturing plants offer lightning fast production with great quality as well, that’s what makes it the world’s manufacturing hub. Some may think the ubiquity of Chinese products is due to the abundance of cheap Chinese labor that brings down the production costs, but there is much more to it than that. In addition to its low labor costs, China has become known as "the world's factory" because of its strong business ecosystem, lack of regulatory compliance, low taxes and duties, and competitive practices. However, China's business ecosystem of networked suppliers, component manufacturers, and distributors has evolved to make it a more efficient and cost-effective place to manufacture products.

Questionable practices

  • Labour is available at a very low cost in China.
  • There are incidences of harsh work environment.
  • There are stories where Chinese workers committing suicide due to work load, pressure, excess work hours and inhuman work environments.
  • Ignoring environmental regulations
  • Poor quality

Unique manufacturing practices

  • Chinese manufacturing hub is a well oiled machine. Suppose to manufacture a particular product needs 10 raw material parts, iIn china there are many manufacturers making those 10 parts with desired specifications.
  • China manufactures goods for the entire world so they produce in bulk. Prices drops a lot when when making in bulk.
  • Chinese people are highly professional even when it comes to labourers and have work culture in their blood.
  • China has more mid-level engineers, a more flexible workforce, and gigantic factories that can ramp up production at the drop of a hat.
  • China also offers tech firms a one-stop solution. China has factories at every level with a capability to deal with changing designs. It used that window to innovate the entire way supply chains work.
  • China is now a place other countries can beat on sheer cost, but not on speed, flexibility, and know-how.
  • Presently, Chinese production processes independent from manual workers, boosting the quality of products.

Disadvantages with India

  • India has technical disadvantages as well as hindrance policies which keeps us far behind the Chinese.
  • Even officers in India do not know what professionalism means, forget labourers.
  • Things are changing but still the ‘Indian mentality’ is not changing anytime soon.
  • Policies need to change. And even then, India needs to be a well oiled manufacturing engine which takes a lot of time.
  • China's business ecosystem of networked suppliers, component manufacturers, and distributors has evolved to make it a more efficient and cost-effective place to manufacture products.
  • India has the geographic, demographic advantage and the necessary technical skills, and just has to get all of these together to compete.
  • Executing the policies has to be essentially done at the state level.

Competing India

We need to build an ecosystem capable enough to support the entire world manufacturing and for this we will have to incentivize exports for next 5-7 years in a gradually declining manner. Specific to the Indian mobile handset industry—it has undergone a remarkable change due to the government’s focus on the ‘Make in India’ campaign. Mobile handset manufacturers now look towards establishing the complete mobile manufacturing ecosystem in the country. For this, the phased manufacturing plan will be pivotal which will also make Indian manufacturers less reliant on imports. It will also lead to more investments in component manufacturing from both foreign as well as local players which will go a long way in establishing India’s own mobile manufacturing ecosystem. Post Make in India; the mobile handset industry is now leaping towards ‘Design in India’. Further, the framework of the Make in India initiative provides the perfect opportunity for stakeholders to transform the skill imparting avenues and trigger knowledge as well as skill development pursuits with the employee communities. The electronics industry that is labour intensive finds it hard to find skilled workforce but with the emerging focus on (science, technology, engineering and maths) STEM skills along with vocational training for the labour workforce can certainly work wonders to the vision of making India a global hub for skilled workforce.

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