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Advantages of manufacturing in China

By Jesus David Cano Romano
July 29, 2015
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With an ever more connected global economy having a competitive edge in all businesses is vital. This is because many companies are competing in very crowded marketplaces. Price has become a large determinate to be able to keep the competitive edge within the market. This has caused many companies to outsource a large proportion of their production to other countries to reduce labor costs. China has effectively emerged as the world’s manufacturer producing a exceptionally large proportion of the worlds goods.

 

China has managed to obtain its position as the world producer by initially attracting investors with very low labor costs. However during its industrialization China has seen a rise in labor costs which does not allow it to have the lowest labor costs in the world anymore. If China no longer has the cheapest labor rates why should you pick China to conduct your business in?

 

Concerning products manufacturing, China has advantages over other Asian countries. One reason for this is the years of experience and knowledge the country has in delivering products that keep up to the high standards that are required by western consumers and legislation. Chinese labor is also significantly cheaper than China’s main rival India for quality, where rapid inflation is making it harder for Indian companies to compete on price alone. Chinese manufacturing expertise has allowed it to keep a very high efficiency and remain competitive in the global market place.

 

Many retailers are growing less dependent on brand names in part because they, and their suppliers, demand and receive good value from Chinese suppliers. When two products are equal in specifications and one is significantly cheaper, a retailer can provide great value to the end customer by choosing the less-expensive product as long as the customer does not demand a brand name. As a consequence many large, familiar Western retailers are no longer willing to pay more for brand-name products when they can get products of equivalent quality for less money.

 

While China’s low labor and product costs are well known, its advantages in services are often underrated. Today, when an importer needs labor-intensive, value-added services, Chinese suppliers and logistics service providers are capable of responding. Applying labels or mixing products on a pallet can be extremely time-consuming and labor intensive. Since Chinese labor costs significantly less than US labor, it is worth evaluating whether a particular service can be moved to China.

 

In Summary, with lower costs for products and labor in China and an ever-growing selection of more sophisticated logistics services, you may find that the time is right to explore sourcing in China. In fact, you may find you cannot afford to pass up the opportunity. We at China 2 West will be able to help you to realize this opportunity and be able to guide you through your process of manufacturing so that you will be able to take full benefits from all the advantages that producing in China can offer.