China: Losing its ‘Factory of the World’ Crown to India?

India’s intentions to take over China’s ‘factory of the world’ tag seem to have ramped up in recent weeks, says the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organisations. But is it likely to be successful? The observation from Nigel Green of deVere Group comes amid growing concern from global manufacturers following violent clashes over Covid lockdowns at Apple’s most important iPhone assembly plant in China. The company is now facing a shortfall of iPhone 14 Pros during the holiday shopping period because of the production issues. The phones start at about $1,000, “suggesting that could represent at least $6 billion in lost revenue,” according to Bloomberg. Against this backdrop, and a general sense of growing unrest in China, it’s hardly surprising that Apple, and other major manufacturers, have been eyeing opportunities in the world’s second most populous country and near neighbour. Nigel Green notes: “Indian authorities have been flagging up attractive incentives, including generous subsidies, for businesses that migrate from China. “But whilst India’s economic outlook is positive, we expect that it will be many years before India will replace China in the supply chain stakes.” He cites four key reasons for this. First, wages are considerably higher in India – some estimates say up to three times – “which outweigh the marginally higher production costs in China.” ADVERTISEMENT Second, the economies of scale that China still enjoys “allow it to have the competitive edge.” Third, India is the only major…

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