Why are companies choosing to produce their products in China?
The assumption is to make more money but there’s a lot more to it. What started a couple of decades ago as a reach for efficiency has now resulted in some entire manufacturing ecosystems being transplanted to China.
For example, Apple doesn’t build iPhones in the United States because there is no longer an ecosystem here to support that manufacturing. There’s minimal supply chain, there aren’t enough super-low-cost workers, and there are not enough mid-level engineers. Many Americans looking for work are still hoping for a return to jobs, salaries, and lifestyles that simply no longer exist.
Here are what some well-known publications are saying about this shift:
‘China’s current outsourcing market is growing an estimated 30 percent annually, and many countries have relocated their headquarters to China to establish businesses. Manufacturing in China opens a world of possibility to create a wide range of products and innovations. In addition, bringing product manufacturing to China allows you to create a higher volume of product for reasonable cost’ – Forbes
‘It’s true that factory labor is cheaper at scale in Asia, even as minimum wages climb in popular areas like China, Malaysia and Vietnam. But the problem with U.S. manufacturing isn’t about wages as much as it is about lack of skilled labor [and] no one invests serious money in the U.S. in factories. U.S. industry can’t compete on this point with China, where the government has poured money into making its manufacturing industry more competitive.‘ – Fashionista
‘Though wages are rising, [China’s] labour productivity is far higher than that of India, Vietnam and other rivals, and is forecast to keep growing at 6-7% a year to 2025.’ – Economist
‘Dell, Hewlett-Packard and Samsung have all flocked to China to lower their production costs, bolster their bottom lines and tap into the world’s largest consumer market. And many rely on local manufacturing partners’ – NY Times
We understand exactly what is needed from every stage of the supply chain process.