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The MITI-V: The Next China? 

By Mary Iannuzzi on December 4, 2019

 

Out with the old and in with the new. China is getting expensive and the crown for low-cost manufacturing will soon be on the market again. Who will take China’s place? Deloitte says an Asia-Pacific nation, one of the "MITI-V".

 

The MITI-V

The MITI-V stands for Malaysia, Indonesia, Thailand, India, and Vietnam. They are the five countries predicted to make the most progress in manufacturing in the coming years. Deloitte predicts that they will all be in the top 15 manufacturing countries by 2022. What makes a country “MITI”? Some key factors are:

1. Population: Big enough to provide its own consumer market and young enough to provide workers for years to come.

2. Education: Strong enough to ensure all workers reach a minimum level.

3. Infrastructure: Extensive access to safe shipping routes, stable power, etc.

4. Politics: Stable and encouraging of global trade and economic growth.

5. Cost: Wages must be low enough to provide skilled labor at very low cost.

 

Why They Will Replace China

China is moving away from low-cost and toward high-skill manufacturing. They are already making some of the world’s most complicated products. They have the worlds fastest computer. They make the iPhone that many of you are reading this post on. As research, development, and quality have increased, so has the cost of labor in China.

In the future, China is likely to fit in with the US and Germany as a manufacturing superpower for complex goods. Add increasing tariffs and the cost of goods may soon be high enough to make Chinese outsourcing obsolete to US manufacturers.

 

The "MITI"est So Far

India is pulling ahead as the likely winner in the world manufacturing race. Their population is massive – more than enough consumers to internally stimulate the economy and plenty of young workers. The population includes a good balance of highly educated engineers and laborers. The government has enacted initiatives to encourage manufacturing output and export. Additionally, the labor cost in India is consistently one of the lowest in the world (often under $2/hr).  

Though the growth of India’s economy has slowed in recent years and it faces infrastructure problems, its strong performance in other factors keep it at the top for emerging manufacturing countries.

 

China is likely to become a very strong competitor to American manufacturing in the coming years. They have already begun to outsource their own manufacturing to other low-cost countries. Regardless of the recent push to keep manufacturing jobs in America, the world will continue to connect as a global marketplace. American manufacturers will look to other low-cost manufacturing companies, likely the MITI-V.

 

Are you looking to outsource manufactured components? Michigan Manufacturing International partners with American companies to source custom mechanical components and assemblies. Our early investment in India has placed us ahead of the game. With three MMI owned facilities in India, we offer the cost saving benefits of sourcing abroad with the excellent quality and customer service of an American vendor. Take a look at our website and contact your local sales engineer for a quote.

 

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