Advantages of China Manufacturing Industry – Still Strong for SMEs
The advantages of the China manufacturing industry have been the secret sauce for millions of businesses around the world when it comes to saving on production costs. While some may say there is no way this can continue, here at China Sourcing International (CSI), we believe otherwise.
Our CSI sourcing specialists are multilingual and have decades of experience sourcing and vetting factories in the China manufacturing industry.
Manufacturers in China are responsible for making everything from simple toys and games to the most sophisticated electronics and as-seen-on-TV manufacturing projects. The reason Chinese manufacturers were able to get contracts for all these manufacturing projects is their ability to undercut any other country in terms of price, without sacrificing quality.
Obviously, if an entrepreneur, innovator, or business can get cheap, but good-quality manufacturing they will go with that manufacturer.
Part of the problem with this scenario is that the average wage of workers in manufacturing plants in China is lower than almost any other country. Many Chinese workers are in a deep state of poverty. However, over the last decade or so, the wages of many have tripled.
Despite that, the average Chinese manufacturing plant worker is far below the average in some of the most poverty stricken countries in the world. It is significantly lower than even in countries like Korea, Thailand and Malaysia.
The Chinese government realizes this problem and has made efforts to help the China manufacturing industry. The government is implementing solutions like making it mandatory for manufacturing plant workers in China to be unionized when working for companies in wealthy countries.
This has made it more complicated for Western companies to use manufacturers in China yes, but not impossible. China has realized that if foreign companies can get their manufacturing done in countries other than China without all the hassles, they will certainly take that route.
China has also realized that they can’t rely on marketing on the basis of dirt-cheap labour anymore. Does this mean they are soon going to be less competitive?
The answer is “No” from our perspective. There are many factories and manufacturers in China that understand the importance of providing cost-effective manufacturing for top-quality products. The real key is in sourcing and vetting these manufactures. That’s where China Sourcing International can help.
Strategy To Keep The China Manufacturing Advantage
- First of all, wages in the China manufacturing industry are only going up, especially in the cities. However, just a few miles out of the city is a vast network of towns and villages with qualified factories that are hungry for jobs working with foreign companies.
- Secondly, China already produces more STEM graduates (science, technology, engineering and mathematics) than any other country. That means that the productivity of the average Chinese manufacturing worker is improving very quickly.
- Thirdly, the International Federation of Robotics had predicted that China would be home to 40 percent of the world’s industrial robots as early as 2019. They have since surpassed that prediction. Again, China’s ability to produce more and better quality products is improving faster than any other country in the world.
President Hu Jintao has made closing the wealth gap a major plank of policy over the next five years. China has embarked on an unprecedented journey to lift a significant proportion of the world’s poor into what we call the developed world.
With China’s overall industrial development strategy, the advantages of the China manufacturing industry remains very strong and we predict will stay for many years more. Manufacturing in China will remain competitive in the global market.
China will continue to dominate the world in manufacturing in the foreseeable future. They will do it in a way that is good for Chinese workers and still remain a viable alternative for North American companies looking for cost-efficiency and top-quality manufacturing.
See also our post on China Manufacturing Facts vs Myths.
Contact China Sourcing International
Let CSI show you how the China manufacturing industry can produce your products more cost-effectively and how simple and hassle-free the whole process can be.
To learn more, please call us at +1 (888) 915-1060 or send us an email.
Sources:
