Bharath Srinivasan is the Guangzhou Chief Representative of Mumbai-based Reliance Industries Ltd. His response to my "Chinese labor market revolution/evolution" series offers an interesting perspective, comparing two of the world's fastest growing economies. Here's an unedited version of his writing:

We can attempt to put migrant worker demographics in China into perspective. The real demand for the workers would have come during 1990-95 as the country was coming out of re-adjustment. I presume the workers would have been around 25 to 30 at this time (Born in 1970s). Now, 15 years later, they are still in mid 40s having a minimum of 15 to 18 years of working years more (may be more considering the superior health of Chinese).

One large plastics factory owner in China told me recently that the new labor law could lead to release of labor from smaller factories that cannot meet the norms and bring more wiling workforce with some guaranteed benevolent employment. I see this kind of readjustment within the Industry cluster a source of labor for the profitably running factories to aid any expansions.

Movement to West could be mainly in textile and Shoe Industries as Plastic manufacturers' set up is a lot more elaborate than the stitching units, I guess. However, such Industry movements will attract that section of migrant population closer to their hometown, provided the moving enterprise is willing to retrain those who do not have the relevant skills.

Hence, for the plastics industry, I see secure supply of workforce in two ways: (1) Existing labor which has some time to go & (2) Readjustments from closures of small units within the industry segment. Yet infusion of new workforce is still an area of concern as is the case in large rapidly developing countries like in India.

The industry spread is all across India, exceptions can be in states where there was what you might call 'poor investment climate'. The reasons are simple. The focus of the Indian Industry was to satisfy domestic needs unlike the export-focused Chinese Industry. Hence they need not be located close to the ports. Secondly, any Industry had to rely significantly of self generated power as all provinces are equally power starved. Hence, most industries generate their own power, which means the engine for the Industry can be moved to any location. Thirdly, labor was available in all locations. India has 80 percent of Chinese population living in 30 percent of the land area. The population density is high in most places.

Interestingly however, there are widespread cases of 'migrant workforce' from states like Bihar, Rajasthan and Orissa in the Plastic Industry. These states have seen the least development in the past 60 years of Indian independence with virtually no new Industry in these places.

However, unlike China, which continues to be a manufacturing economy, India has moved into a 'service economy' in a big way. Most of the young graduates prefer white collar jobs which are also available in abundance. The recent flash of excellence displayed by Indian companies in manufacturing has mainly been in automobile, its ancillaries and the steel Industry which largely supports the automobile industry. Hence, finding a blue collared workforce for other industries in India is a lot more difficult than in China. I should also add, the productivity and work culture in India has much to be desired in comparison to China.

Hence, I might conclude that China is in a much better position than India in terms of labor right now.