Thomas Heger
Americans stand to benefit in the long term from diversifying where U.S. companies build their products, moving manufacturing away from China and into India. But this move would not be without short-term costs.
China stands as a manufacturing colossus, producing nearly 30 percent of the world’s goods, from iPhones to steel. India, despite its growing economy and young workforce, trails far behind, contributing just 3 percent to global manufacturing output. Nonetheless, India has emerged as a key alternative, with a population of 1.4 billion and a relatively untapped trade market for the U.S. given the current tariff regime.
American companies have for decades turned a blind eye to China’s authoritarianism, lured by cheaper goods while ignoring the nation’s hegemonic aims of a different world order. Yet it is China’s authoritarianism and its resulting cultural and political landscape that America has profited from — giving China the edge over India for decades to come in manufacturing.
Understanding this tradeoff — increasing trade with India, a country that has more in common with the U.S. politically, but is decades behind in manufacturing infrastructure — offers lessons for policymakers navigating a changing global economy. It should raise American’s awareness about quality, costs and trade challenges to come from more reliance on India.
Educational discrepancies underscore China’s advantage. China produces 3.6 million science, technology, engineering and mathematics graduates annually — many trained in vocational skills for robotics, automation and engineering. India’s 2.6 million annual STEM graduates prioritize theoretical knowledge, with only 5 percent of the workforce formally skilled compared to China’s 30 percent.
No comments:
Post a Comment