‘Made in China’ Development Manual Has Lessons India Can Learn

                                                           All roads lead to the city in China. More Chinese live in cities than villages now, with nearly 690 million people occupying urban space compared to 656 million in the countryside. China may have drawn flak for ignoring environmental, socio cultural, heritage and human dimensions in the rush for unscrupulous development – yet as a keen learner, we have number of ready and right pages to pick and learn from the “Made in China” development manual. For example, the pace of Chinese urbanization is faster, but an interesting contrast to India is that more than twice as many Indians live in big metropolises (>10 million) than Chinese. This may possibly have to do with advanced industrialization in rural areas and small towns in China. It has invested in growth centers provinces have become centres of highly successful industrial clusters of specialized, mainly family-owned enterprises. Dating town in Zhejiang province produces a third of world’s socks. Three-quarters of the world’s neckties are produced in the town of Shengzhou where hardly anybody in the local population ever wears one. Another town, Yiwu is the world’s largest producer of buttons. Guangdong province of South China has world’s kargest mall for furniture with towns after towns dedicated to building industry-related manufacturing and trading outlets, be it furniture, electrical fixtures, sanitary ware, floor finishes or accessories. These largely export-oriented units, set within the largest vision of simulating growth in smaller towns, have generated considerable job market and triggered amenity and infrastructure development to check migration to mega cities. Country’s overall economy has also depended greatly on these export-oriented units. For example, China volume of export is whopping 1600 billion dollars. Of which, despite hate-hate relationship with USA, it has the highest share of exports with the US at the magnitude of over hundred billion dollars. India ranks seventh in China’s export destination at nearly 40 billion dollars. Underpinning China’s export success is a combination of long term investments in automation and sport-term depreciation of the currency. Manufacturers across China are investing in labour saving equipment, reorganizing shop floor management and taking other measures to maximize production efficiency. Important to note is that is much or more than automation it has concentrated on streamlining the processes to yield maximum production with minimum waste within a mass production mode rather than customization. Even smallest component and actions are given their due for cost competitiveness, like investing in computer-controlled drill that does the work of up to eight people, or a garment company buying machinery to manufacture buttons more cheaply. These constant endeavours have ensured that despite rising labour costs the final product cost remains competitive for export and quite often cheaper than before. Central authorities have strongly endorsed stepped-up equipment investments by exporters. Labour shortages in export zones have also meant that workers have not tended to protest the introduction of more machinery. With domestic Chinese economy slowing, the government has also counteracted some of the pain by taking currency actions to help exporters. It has allowed the country’s tightly managed currency, the Renminbi makes Chinese goods less expensive in foreign markets, and makes imports less affordable in China. Urban infrastructure is constructed, operated, and maintained by separate companies set up by Chinese government with a large stake in cost recovery. While, in India, much of the time the municipal government performs these functions through its departments. Chinese cities have the autonomy to raise investment funds by monetizing land assets and to retain 25% of the value added taxes. Large infrastructure projects in China often have special purpose vehicles to get access to the debt market. Not just the fiscal system, the whole urban governance structure in India is not decentralized enough. Mayours d not necessarily have enough executive powers or accountability to the local citizenry. The chief official in policy implementation is often the municipal commissioner, a state government official accountable upwards, to the higher-level government. This is quite different from the empowered mayors in cities in other developing countries. In coastal China local business development under the auspices of local governments have contributed substantially to local revenues and building of local infrastructure. In India this is rare. With centralized system China has circumvented models to positively contribute to remote places compared to remote places compared to the so called decentralized powers assigned to federal, state and city municipalities in India.

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