One Perspective: Choosing China Over India

I always find it insightful to hear what practitioners have to say when it comes to making regional supply base decisions. Over on Editor and blogger Magery Conner interviews Mike Wagner from Cherokee International on their decision to locate a regional supply base in China versus India.

According to Wagner, "India's educational strength is more known for software engineering rather than analog engineering. China has a much stronger power-engineering educational system, and analog expertise is the key ... India also doesn't really have an electronics-supply chain. So, if we were to manufacture power supplies in India, we would have had to pay to ship materials from China to India for manufacturing, and then we'd have to pay added freight and duty to ship the finished product back to the end customer in China. China is a self-contained system of engineering, parts, labor, and customers."

There's something about the phrase "self-contained system of engineering, parts, labor, and customers" which has a certain ring to it. Certainly, China has done a better job than India in building out an independent manufacturing and supply chain ecosystem to date. But I wonder in ten years time if Wagner's answer to the question would be different. In my view, the Chinese economic miracle has had more to do with well-executed centralized economic planning than any advantage from the educational and engineering prowess of its workforce. Long term, despite the infrastructure chaos that is India, I think it will catch up. And that's because central planning will only get an economy so far.

Jason Busch

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