Industrial Dynamics in China and India: Firms, Clusters, and Different Growth Paths (Ide-Jetro)

Industrial Dynamics in China and India: Firms, Clusters, and Different Growth Paths (Ide-Jetro)

Moriki Ohara, Manimegalai Vijayabaskar, Hong Lin

Language: English

Pages: 288

ISBN: 2:00073602

Format: PDF / Kindle (mobi) / ePub

This book is one of the first fully-fledged studies to examine the next world-class industrial leaders emerging from China and India; exploring the domestic and international factors that have led to their rise, and comparing their experiences with other East Asian late-comers such as Japan.

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sizes. The underlying assumption is that the more smoothly the “subordinate” firms of, at first, inferior capability can catch up by upgrading their capability, with those of superior capability – which means that they become homogeneous – the harsher the competition becomes, as observed in China and vice versa in India. In addition, to exemplify how smooth the upgrading of technological capability by “subordinates” was in China, the degree of retention of engineers – the engineer ratio – will be

number of firms has been relatively limited in capital-intensive sectors, so that competitive pressure has been relatively weak. That is considered to be the reason for their higher, more stable profitability, which probably has enabled them to 9780230_298781_03_cha01.indd 34 8/13/2011 6:38:33 PM Competition and Management in Manufacturing Sector (a) 1986 (b) 35 1993 12 9 y = 2E−05x + 8.3715 R² = 0.0368 11 8 10 7 9 y = 0.0005x + 6.0742 R² = 0.2448 6 8 7 6 5 5 4 4 (d) 1998

commitment to product development, which is the same as in automobile industry (Asanuma and Kikutani 1997; Ohara 2006). Such a system can be managed only in a situation where makers and suppliers share information/knowledge on the technology that suppliers use, and the maker can make a proper evaluation of the concrete costs of development based on the shared information. On the other hand, Chinese makers force suppliers to shoulder most of the risk. When development fails – meaning that the

present – 20–30% a year. Along with the fact that staff-level laborers earn higher wages and have higher liquidity, presumably in India staff-level labor is scarcer than worker-level labor. In China, on the other hand, worker-level labor is scarcer vis-a-vis staff than in India. This interpretation sounds odd from the viewpoint of the conventional image of both countries, where it is believed that abundant rural workers have been the source of Chinese competitiveness and where there are a large

China’s manufacturing costs are only 3 cents less than India’s. This differential is particularly significant given that – for many countries – cotton costs constitute only half of total costs; yet for China and India, their cotton industries appear to compete largely on the basis of the price of raw cotton. The role of raw-material prices is even more central to synthetic-yarn production – given that for advanced and developing countries alike, raw materials constitute between 70–80% of total

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