Manufacturing Country

Bangladesh continues to make headlines as new revelations about the tragic Rana Plaza factory collapse come to light. This publicity is causing importers and international analysts to wonder about the pros and cons of sourcing products from a center for ultra-cheap labor such as Bangladesh in comparison to other options, notably China.

Below we’ve listed 4 key characteristics of the manufacturing sectors in both Bangladesh and China so you can see how they match up – both in terms of manufacturing capital and ethical issues. Keep in mind that in order to find out how your specific Chinese supplier scores on these metrics, you can schedule a factory audit.

Bangladesh vs. China - 4 KEY Manufacturing Comparisons

 

1. Worker Safety

While Chinese workplace safety standards are still not nearly up to western standards, Bangladeshi workers face even greater dangers. Although certain issues definitely exist in both countries – inadequate ventilation and lack of personal protective equipment, for example – the structural integrity of factory buildings themselves is far worse in Bangladesh.

Bangladesh vs. China - 4 KEY Manufacturing Comparisons

This can be attributed to a number of reasons. For starters China may have nearly 5.6 times the population as Bangladesh, but it also has roughly 65 times more land. This means there is much less of a reason for factories in China to build up – they can spread out much more easily.

Additionally, the patchwork of governing bodies responsible for regulating and enforcing building codes in Bangladesh can leave deadly gaps, allowing tragedies like the Rana Plaza collapse to happen. Legislation dating back to the 1950s combined with more recent 2009 laws has left the authority to oversee construction jaggedly divided between the Housing Ministry and the Ministry of Local Government. By comparison, China's construction industry is heavily regulated, and building codes are more often enforced.

Bangladesh vs. China - 4 KEY Manufacturing Comparisons

 

2. Worker Rights

In light of recent events such as the Rana Plaza tragedy, Bangladesh has passed some legislation designed to strengthen workers rights. These laws include provisions that protect workers who wish to unionize, prevent gender and disability discrimination, and establish welfare and retirement funds. The extent to which these laws actually improve the lives of laborers is dependent on how well they are enforced, which is a shaky proposition at best.

Chinese workers are, in theory, protected by a fairly comprehensive set of labor laws which include requirements for minimum wages and overtime pay, maximum working hour limits, and anti-discrimination clauses. No protections are provided for labor unions, and such organization is generally frowned upon as a matter of cultural norms. As in Bangladesh, Chinese labor laws are only effective when enforced, and violations rarely come to light unless high profile retailers or brands (re: Apple) are implicated.

Bangladesh vs. China - 4 KEY Manufacturing Comparisons

Truthfully, Bangladesh and China may technically be at a stalemate on this issue. In reality, the mobility of China’s workforce and the sheer number of factories offers Chinese laborers more rights: if conditions at one factory are unbearable, it can be easier to find new employment opportunities elsewhere for a Chinese worker than it may be for a comparable Bangladeshi worker.

3. Working Hours and Pay

In terms of monthly wages, it should come as no surprise that China’s booming economy is providing laborers with a minimum wage that ranges from $100-200 USD depending on the province and city. This is of course not a king’s ransom, unless it is compared to the minimum wage for a garment worker in Bangladesh: $38 USD per month.

Working hours are capped at the same maximum of 48 hours per week in both countries. However in both countries it is also remarkably common for these laws to be ignored completely. So common, in fact, that most factories have two sets of payroll records – one that shows actual hours worked, and one that conforms neatly to labor laws.

Bangladesh vs. China - 4 KEY Manufacturing Comparisons

As noted earlier, China’s economy is booming. This allows the government to keep minimum wages rising somewhat in line (if not totally in lockstep) with the cost of living across the country, giving China the edge here. Bangladesh does not have this luxury. In reality Bangladesh’s supply of cheap labor is what has attracted so much manufacturing to the country in recent years.

4. Infrastructure

No nation on earth can become a manufacturing powerhouse without extensive, modern, and reliable infrastructure. China’s historical investments in infrastructure have been massive, dwarfed only by the investments that Beijing is still planning. By this metric, Bangladesh cannot begin to compete.

Bangladesh vs. China - 4 KEY Manufacturing Comparisons

Bangladesh is served by a network of primary and secondary roads that amounts to about 125 thousand miles, but only 12 thousand miles of those are actually paved. By contrast, China boasts 2.6 million miles of roads, with 39 thousand miles of expressways. In addition, China is home to the world’s largest high-speed rail network of 5,800 miles – and it is set to double that by 2015. Bangladesh has just 1,700 miles of track, none of which is built for high speed trains. These trends repeat themselves when comparing the number of airports and ports in each country.

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Topics: Sourcing

AQF Team

This article was a collaborative effort among various members of the Asia Quality Focus team.

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