Globalization myths

Globalization myths
Myth # 1:
China and India's only advantage is labor arbitrage
I have heard arguements that the only advantage countries like India and China have is their (unlimited ?) supply of human resources earning salaries as much as 10 times below their western counterparts. No doubt, the low wage structure has been a great advantage for these countries but there are other factors that help companies (from these countries) win in the flattening world.
Quality of goods produced - They have been able to consistently produce goods and services of comparable (or better) quality. Consider Mahindra and Mahindra a lesser known compnay that poduces tractors. In a very short time (after launch in the US) this compnay has deveoped a reputation for quality and is eating JohnDeere's market share. (See http://www.businessweek.com/magazine/content/06_31/b3995001.htm?chan=search). Indian IT services companies do not hesitate in promising 5% year on year improvement in productivity while signing new maintenanace contracts. This clearly demosntrates the value they bring in terms on quality.
Quality of education - Over the last few years the quality of education has improved in India (not sure about China). This has helped in developing a more knowledgable and more competitive work force. Number of engineering and management graduates has been steadily rising. USA produces about 60,000 engineering graduates every year. Compare this with about 310,000 in India and 600,000 in China.
It is amazing to see how India and China have leveraged their big disadvantage (read liability) of large population to make it an asset.

As usual -comments welcome...