China has a powerful economy and their manufacturing industry contributes good number in their statistics. More than 50% of all the products available in the market have been manufactured in China. A key factor in attracting foreign investment has been the low labor cost in the country. Generally, it also affects the total cost of manufacturing and China offers cheaper rates. This advantage results in greater sales since the selling price will not be affected while the production cost is decreased.
Additionally, productivity in China is fast compared to other countries. The Chinese manufacturers are able to perform well in a shorter span of time while maintaining the quality that is expected. Another thing is that, China is capable of it imitating certain specification. This creates issues with different brands but China can actually produce similar products given just a model or a sample.
On the other hand, manufacturing in China has made an impression in other countries. The negative opinions about the products finished in the country may be quite questionable to other consumers most especially when tagged “Made in China”. Also, having low labor costs accounts manufacturers to more work which can actually affect the quality of the product. Other challenges that could also arise would be the cost of shipping and projected time of exporting back to the investing company. Also, China’s political and economic situation could also affect the cost depending on the situation.
Considering the advantages and disadvantages, the US is one great economy who has considered having products manufactured in China. The brands remain American but the factories reside in China. Certain brands have ventured into these for their own reasons such as Mattel, Inc. and Ohio Art Company who wanted to cut costs in their toys. In the case of technology, IBM Personal Computers was sold to a manufacturer in China to focus more on software and expansion of high-end computers, moving on from hardware. When it comes to retail, US companies have also been working with Chinese manufacturers.
The fact that China is doing well in the textile industry for making polyester gives an advantage compared to other Asian countries who also manufacture clothes. The US definitely imports a high percentage of products manufactured in China and this has a positive effect on China’s economy. It would be quite difficult to compete with the manufacturing technology of China and their strategy to create business relationships with countries all over the world.
However, certain policies must be looked into so that this exchange of work and product remains organized and continuous. The two nations must learn from what happened in history specifically during the Sino-Japanese War where the Nanjing Massacre happened and killed both Chinese and Americans in China. It had created economic turmoil for China and the country needed help which the US was available to extend then. It was difficult for China to build the country up and improve all aspects. China still considers their country as developing and improving their manufacturing industry would be beneficial.
Through the creation of ports and infrastructure, Chinese manufacturers can attract more investment not only from the US but other countries as well. Adding to that is having more workers who are skilled because this will create a competitive edge for the country. Furthermore, the higher demand for their production would also require more people to be able to assure the investors with the quality of their output.
The US certainly is not retracting from manufacturing in China due to all the benefits that they can maximize. China must be able to meet the expectations and more importantly, prove that they can produce good quality products to cloud over the imitation issues which they are known of by more consumers.