China vs. Thailand Outsourcing Smackdown

David Dayton over at the consistently enlightening Silk Road International Blog did an interesting post comparing China to Thailand for manufacturing, entitled, Thailand vs. China.

David is eminently qualified to make this comparison because his Master’s Degree focused on “Comparative Chinese and Thai Corporate Cultures,” he is fluent in both Thai and Mandarin, and he has spent considerable time doing business in both places.

Dayton starts his post off by quoting a friend saying that “Every thing in Thailand is slow except for the internet and Everything in China is fast except for the internet,” and he then sets out the following eleven comparisons:

1. Legal requirements for export are not nearly as burdensome in Thailand

2. Thailand’s infrastructure is at least as good as China’s — ports, airports, tollways. Nothing new, I know, but this is one of the major drawbacks of working far inland in China or even close to large cities in Vietnam or Cambodia. The big plus in Thailand is that there are no inter-provincial tariffs or restrictions on the flow of goods like there is in China.”

3. Even with the recent wage increases labor is still more expensive in Thailand than in China. I’m seeing cost differences of about $50 to $75 a month between factory workers in China vs. Thailand.

4. The environment is much more “international” in Bangkok than it is in Shenzhen — more so than even Hong Kong, There isn’t as much English on signs but the exposure to “the West” is certainly as much or more. Bangkok seems to be becoming more western and Hong Kong more Chinese.

5. The advertising is much more sophisticated in Thailand than in China where it’s still a relatively immature industry. I was consciously amazed at the higher quality of both radio and outdoor media advertising in Thailand.

6. Nationalism is alive and well in both countries, but Thailand’s flavor is much less strident. China seems to be a bit more angry, with something to prove, while Thailand is much more comfortable with its unique place in the world.

7. I’m constantly told the same thing when I tell people in Thailand that I live in China: “You know, labor is more expensive here, but you get better quality work too.” Almost to a person, this was the response I heard — more than 10 times in just one day.

8. Thailand has a very well developed export base for automobiles, machinery and electronics, though China has some of this too.

9. Staffing in China is difficult in terms of retaining top-level local employees as well as in finding and retaining low-end factory labor. Thailand has a similarly tight market in top-level employees. The service levels are much higher in Thailand as is education in general. Professional standards seemhigher in Thailand as well.

10. The traffic in both Thailand and China is horrible, but each has its own perils. In China you are literally taking your life in your hands when you get into a car. Thailand is completely different. The traffic in Bangkok is so bad at almost all times of each and every day that it is estimated to lower Thailand’s annual GDP by multiple points!

11. Banking (I can’t believe I’m going to say this), but hands down China has better banks, both in terms of service and accessibility. In China if you need a bank, you can get one open from 8AM to 5PM 7 days a week. Thailand is 9AM to 3:30PM five days a week and off every holiday possible.

What do you think?