Comparing Chinese Manufacturing and Indian Services

I was doing some number crunching for the book and came up with this chart.

When you hear the phrase “outsourcing of jobs to India and China”, which you do often in American politics today, there is going to be a tendency to put them both on an equal footing. But the scale is enormously different. The gap is probably even wider than the chart indicates because the data is for Chinese goods exports to the US and Indian IT-BPO exports worldwide. Assuming that productivity ($/worker) in Chinese manufacturing is below productivity in Indian services, the Chinese jobs that depend on exports to the US have got to be more than 10x the corresponding Indian jobs. And yet, India plays nice with its exchange rate while China has an effective peg to the US dollar. Go figure.

The data is from OECD and RBI.


  1. Abhishek says:

    Myriad difference in numbers. As in India, I know there is huge debate in US of A for outsourcing, but do they talk the same about Chinese?


    1. Basab says:

      Outsourcing in the US refers to both offshore manufacturing and services. The Indian press amplifies it so much that one cannot even hear the references to Chinese mfg in India.


      1. Abhishek says:

        What about USA press? Do the say the same for Chinese export sector?


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