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Labor Issues in China and India

Labor Issues in China and India. Sanjay Kotte China & Globalization – Professor Rong. Our Agenda. Thesis Issues Impacting Labor China Growth and Development Issues to Address Recommendations India Growth and Development Issues to Address Recommendations China & India – Moving Forward

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Labor Issues in China and India

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  1. Labor Issues in China and India Sanjay Kotte China & Globalization – Professor Rong

  2. Our Agenda • Thesis • Issues Impacting Labor • China • Growth and Development • Issues to Address • Recommendations • India • Growth and Development • Issues to Address • Recommendations • China & India – Moving Forward • Q&A

  3. Thesis • China and India are symbols of growth yet both must address important labor issues in order to ensure future success • Understanding internal labor environment and how it relates to the global economy • Reducing poverty and unemployment through infrastructure and social program development • Addressing regional disparity in development by encouraging and influencing foreign investment

  4. Issues Impacting Labor • Legal System / Labor rights • Political system regarding development and commerce • Social Services • Natural Resources and Landscape

  5. China – Growth & Development • Historical growth is a product of efficient, all-powerful government • “top down” approach for developing the nation • Historically has had a closed economic policy on focusing on internal growth and using protectionist policies • Opposed Global political order • Investment in State-owned Enterprises • China opened its economy to international trade in 1978, and now encourages international investment • Dismantling of the “iron rice bowl” promise of employment • Steady stream of foreign investment

  6. China – Issues to Address • Unemployment • Lack of Education • Eastern China vs. Western China • Attempts to improve growth through international investment have reduced commitment to public services and poor western areas • Tax incentives offered to MNFs to encourage investment • Government favors development of the coastal areas • Insufficient social programs largely impact labor and poverty • Reluctance of China to offer more Labor rights • Fear of losing control • Fear of losing competitiveness • Neglecting needs of minority groups

  7. China – Recommendations • Expanding employment by developing the economy • Development of the service industry • Exploiting advantages in labor resources • Establishing programs to bring laid off people back into the workforce

  8. China – Recommendations • Expanding employment by developing the economy • Improving Educational and Healthcare programs • Implementing Vocational Training • Technology Improvement • Labor law reform

  9. India – Growth & Development • India gained independence in 1940s • India’s past economic policy has failed: • 1950s – “mixed” economic model with capitalism and communism was inefficient • 1970s – more socialist approach was also disastrous • India’s recent policy • Early 1990s – gradually opened up markets through economic reforms • Slow privatization of public-owned industries

  10. India – Growth & Development • Over past 15 years, India has been 2nd fastest growing country in the world • “bottom-up” growth strategy that is messy and unplanned but works • Factors contributing to growth: • Efficient use of capital • Deep private sector • Well-regulated financial system • Sturdy rule of law • Focus on managerial innovation • Consumer attitudes

  11. India – Growth & Development • Highly talented labor pool • English is most widely spoken language in India • Education places foundation for a services, knowledge, and IT-based economy • Past assumption: India is stealing jobs of American Workers • Today’s belief: India allows American firms to become more competitive, hence creating more jobs • US tech employment is growing – 17% more tech workers in US today than in 1999; will increase by 30% over the next decade • The large transfer of jobs didn’t occur

  12. India – Issues to Address • Burgeoning population and its pressure on lack of infrastructure and social services • Prevailing poverty • Corruption • Unemployment

  13. India – Recommendations • Privatize infrastructure development and redirect government funding • Encourage private investment • Use available funds for social programs • Offer region-based incentives • Encourage interior investment • Help create jobs and improve poverty

  14. China & India – Moving forward • Both countries have extremely different histories but face similar problems: • Must improve infrastructure to encourage foreign investment • Must address issues of regional disparity of investment • Must utilize advantages of labor pool and help citizens find a role in the economy to reduce unemployment • Must address lack of social program investment in order to provide citizens with a better standard of living

  15. Questions?

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