Hyderabad:China continues to be the most suitable location for global manufacturing among 48 countries in Europe, Americas and the Asia-Pacific in the year 2020, according to a new report by property consultant Cushman and Wakefield.
The consultant, in its Global Manufacturing Risk Index (MRI) report for 2020, said that the US has retained the second position, while India has moved one place higher to rank third. The rankings are based on the consultant’s baseline scenario that does not consider impact from the ongoing Coronavirus pandemic but takes into account the US-China trade dispute. The scenario gives equal importance to a country’s operating conditions and cost competitiveness.
“Diversification combined with a move up the value chain in order to focus on telecom, hi-tech (40% of robots produced globally are made in China), and computers have helped the Chinese manufacturing sector remain somewhat resilient to trade wars,” the report said.
Interestingly, the report noted that despite government initiative to attract manufacturers, India has not been able to make investments on the scale of China to build and modernise its infrastructure networks.
However, it said that keeping in focus the US-China trade war, India stands to benefit from any plant relocations from China to other parts of Asia. Though reforms to both land and labour laws are critical to India’s success as a global manufacturing location, the report added.
The world’s two largest economies China and the US have been locked in a bitter trade battle for some time now. The dispute has seen both nations impose tariffs on one another’s goods. While US President Donald Trump has long accused China of unfair trading practices and intellectual property theft, China seems to be acting on its perception that the US is trying to curb the Asian nation’s rise as a global economic power.
Talking about the US, the report said that with the rapid adoption of technology into production processes, the country even with its higher-cost workforce could start to be better aligned to compete with China for manufacturing jobs.