Heard that salaries are higher in China than in India. Event though Chinese companies pay more for their employees, their products are much cheaper than Indian products. What could be the reason behind this phenomena?
in Business+Finance by 2 2 9
It is because of mass production. This is what I read in news papers.

5 Answers

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This is mainly because of economies of scale and low input costs.

When products are manufactured in large quantity, the fixed cost barely affects the product cost. Hence they can concentrate on marginal cost of the product and make competitive pricing by cost control. 

Also China can procure raw materials at low cost from other countries mainly because having exploration and extraction contracts with various poor nations.
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Comparing to India, China has less corruption. More work force, less production cost and less little labour cost. China has more natural resources, for example, less cost of electricity and transportation cost than India. China is a Communist country, on the other hand, India is a democratic country thus more freedom, more corruption.
+1 vote
This is always a situation that can have something to do with two things and one of them is the business environment.

There is this saying that when a government of a country makes the business environment better for those that are looking at entering business, it is always better for them to thrive and do well.

Just like the situation that we are having in Nigeria where it is expensive to do business, you will notice that most business there will definitely struggle. I think that the government of China are doing everything within their powers to ensure that the business owners that are in the country enjoy good tax tariff, good infrastructure that aids the business and this is one thing that makes that cost of producing goods is not high.
by 4 14 32
+1 vote
When you take a good look at how the world works today when it comes to production of goods and services, China is the highest producing country with a massive workforce behind each company over there.
There are thousands of companies that are available and fully active in the production of virtually any type of products that are purchased and distributed worldwide. There is no part of the world where Chinese products are not shipped to and sold with great speed. When it comes to quantity and quality of their products, everything depends on what you pay the Chinese companies to produce for you. When you pay for high quality products, they provide it for you and when you pay for low quality products, that is produced for you as well.

The competition over there makes their products cheaper.
by 5 36 112
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Technology in China is a bit more advanced than in India and they have a lot more factories there than they do in India. This makes it possible for China to mass-produce products at a much lower cost than they can do this in India. Plus there are more factory workers in China and they pay a much lower rate of money to these people to do their jobs. The people that live in China run the factories around the clock and they have plenty of people to work there and even more looking for work. 
by 6 24 56

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