The news today has been full of stories about how the manufacturing industry in China is on the decline and there are many reasons why this is true, but in spite of this China manufacturing still remains irreplaceable. The truth is that it will always be more cost effective to produce goods in China than it would be to do so elsewhere, even in other countries with lower costs of living. Here are a few reasons why.
Southeast Asia Is Cheaper, But Not Necessarily More Worthwhile
It is true that many Southeast Asian countries have started to catch up to the manufacturing giants in Asia, with some of them even surpassing them. This includes countries like Vietnam and Thailand which are experiencing a manufacturing boom.
However, there is still much work to do before these countries can truly compete with China and the rest of the Asian manufacturers. Firstly, the cost-effectiveness of labor in Southeast Asia is still incomparable.
China has a large pool of skilled workers who are already well-trained for its factories. Not only does this make it easier for companies to find trained workers when they need them (as opposed to training new ones), but it also means that these companies have more time and resources allocated towards innovation rather than training.
Also, many Southeast Asian countries also continue to heavily depend on exporting natural resources such as oil or raw materials, and their markets are susceptible to fluctuations in those prices.
Nothing Can Beat A Supply Chain That Covers Everything
Not every country has a full-fledged supply chain like China does. Developed countries like Japan, South Korea, and Taiwan specialize in making certain parts while other countries specialize in other parts. For example, Japan specializes in engines while Malaysia specializes in tires. But China can take care of pretty much each category of products, all the way from textile with low added values to advanced technology.
So even if you have your own supply chain or factories elsewhere, it’s hard to match what China offers. As we said before, it doesn’t matter whether you’re selling a cheap toy or an expensive phone. At the end of the day, you need many components that are assembled into final products by many manufacturers under one roof so that you’ll be able to do mass production at an affordable price point.
That’s why so many companies choose China as their manufacturing hub – because there is no better alternative.
Well-Established Infrastructure = Fewer Shipping Hassles
China can be called the empire of infrastructure, and it provides a strong foundation for its manufacturing sector.
For instance, roads are well-maintained, which means that products will have an easier time getting from one location to another without too much risk of damage or delay. Railways are also plentiful in this country and you’ll find good connections between different parts of the country – perfect for transporting heavy goods like furniture or building materials with ease.
We can never forget the ports in China. 10 out of the 7 world’s busiest ports are located there. They handle a dominant percentage of global container shipping volume every year. In addition, coastal areas are highly developed and offer easy access to many major destinations by sea.
There’s also an abundance of warehouses to keep large quantities safe and secure while they wait to be shipped out to their destination. All these factors combined make it clear that there is no other place on earth quite like China when it comes to manufacturing!
Local Talent Pool Is Immense
The Chinese labor market is overwhelmingly large and there are more than 300 million people in the country that have been formally trained. In fact, China graduates more engineers per year than the US. This means that if you’re looking for skilled labor, you’ll find it in spades. Plus, with a population of 1.3 billion people, there’s a huge pool of talent to draw from.
With English being the most sought-after second language in China, communication skills are typically not an issue either.
Many industrial designers there have a western background. Due to their design experience combined with their knowledge of both cultures, they can bridge any cultural gap between east and west better than anyone else.
Moreover, you will see many engineering graduates coming out colleges in China in an enormous number every year. A lot of them were taught by some of the best professors on earth who also happen to be experts at business strategy as well as engineering innovation.
So these students know how to think outside the box and make innovative products that can compete anywhere around the globe because they understand both sides very well.
We Are Your Go-To Option
When it comes to your choices for manufacturers, you have many options. But when it comes to quality and price, few are better than China. Despite the country’s rising costs of labor and other resources, all the perks above still make China a preferred option for many businesses. With our 17 years of experience and networks in both China and Southeast Asia, we can ensure a smooth and hassle-free manufacturing process for your business. Contact us today!
