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China's Manufacturing Edge: Exploiting Labor, Not Tech, Says Report

A report argues China's manufacturing advantage is rooted in a repressive labor system that suppresses wages and enforces extended hours, not technological superiority or scale. It uses Tesla as a case study, showing its Shanghai factory produces nearly double the vehicles per worker compared to its Fremont, California plant. The Shanghai Gigafactory recently celebrated producing its 4 millionth vehicle, highlighting its massive and rapid output. This plant is central to Tesla's global strategy, serving both the Chinese market and exporting vehicles worldwide.

Key Points: China's Manufacturing Advantage Built on Labor Exploitation

  • Labor exploitation drives China's edge
  • Tesla Shanghai output double US plant's
  • Wage suppression and long hours cited
  • Structural cost gap from different rules
2 min read

'China exploiting workers to gain advantage in manufacturing sector'

Report claims China's manufacturing lead stems from wage suppression and lax labor laws, not technology, citing Tesla factory productivity data.

"a structural cost gap that reflects not superior productivity, but a different set of rules governing how labour is treated - The Diplomat"

New Delhi, Jan 9

China's big advantage in the manufacturing sector vis-a-vis other countries is not so much due to economies of scale or the fact that the country has rapidly caught up with the technology of Western countries, but its exploitation of labour under a repressive system, according to a report.

An article in The Diplomat highlights that China's "advantage is not simply about efficiency or technology. It is embedded in a labour system that systematically lowers costs through lax enforcement, extended working hours, and wage suppression. The result is a structural cost gap that reflects not superior productivity, but a different set of rules governing how labour is treated and how much it is allowed to bear".

The article compared the car production figures of Tesla factories in the US and Shanghai to drive home this point.

In 2023, Tesla's Fremont factory in California employed 20,000 workers and produced about 560,000 vehicles, or around 28 vehicles per worker per year. Tesla's Shanghai Gigafactory, with a similar workforce size, produced close to 1 million vehicles - nearly 50 vehicles per worker annually, the article stated.

Tesla's Gigafactory in Shanghai rolled out its 4 millionth vehicle on December 8, 2024, marking a new milestone as the US carmaker deepens its development in step with China's rapidly growing new energy sector, according to a report by Chinese news agency Xinhua.

The company's Shanghai plant, its first gigafactory outside the United States, began construction in January 2019 and produced its first vehicle in December of that year.

Now turning out a new car roughly every 30 seconds, the plant accounts for nearly half of Tesla's global electric vehicle deliveries.

It took more than 30 months for the plant to produce its first 1 million vehicles, while output rose from 3 million to 4 million in about 14 months, according to the company.

It serves both the Chinese mainland market and overseas customers, with vehicles exported to Europe and the Asia-Pacific region. In October, the Shanghai plant shipped more than 35,000 vehicles abroad, the highest monthly export volume in two years, according to the company.

In February, Tesla's new Megafactory in Shanghai, dedicated to manufacturing energy-storage batteries, launched production, which is its second major facility in Shanghai and the first of its kind outside the United States, the Xinhua report added.

- IANS

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Reader Comments

S
Sarah B
The Tesla comparison is stark. 28 vs 50 vehicles per worker speaks volumes. While efficiency is one thing, this seems to cross into another realm. It raises ethical questions for global consumers. Do we want cheaper products at this human cost?
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Rohit P
Absolutely true. China's model is not sustainable or desirable. India has a demographic dividend, but we need to invest heavily in vocational training and create an ecosystem where high productivity comes from innovation and worker welfare, not coercion. Jai Hind! 🇮🇳
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Priya S
This is why PLI schemes and focusing on 'Ease of Doing Business' is so important for India. We need to attract investment, but with strong labor laws that protect our workers. We can't compete by lowering standards to China's level—we must compete by being better.
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Michael C
While the report's point is valid, we should be careful. Sometimes these comparisons oversimplify. Automation levels, supply chain integration, and plant design also play a huge role in output per worker. Not defending labor exploitation, but let's get the full picture.
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Kavya N
It's a wake-up call for our policymakers. We have the world's eyes on us as an alternative to China. Let's build factories that are efficient AND where workers have dignity, fair wages, and reasonable hours. That's the real advantage in the long run.

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