China Manufacturing Companies Continue Competitive For Decades

China has been the predominant manufacturer in the world for several decades… and it will continue for several more.

It’s not about being optimistic.

China has taken care of several fundamental factors that will take other countries several decades to put into place… if they even have the discipline and political will to make it happen.

That’s not to say other countries won’t be able to increase their manufacturing industry, it’s just that the Chinese manufacturing industry is several decades ahead of any country that might be able to compete.

Why China Manufacturing Companies Continue To Have An Edge

 1.  China has an extensive high speed rail network.

By 2015 China had over 19,000 km of high speed rail in operation. That will grow to over 30,000 km by 2020.

Fast transport throughout the country means better access to raw materials and supplies.  Faster rail transport also means lower costs for materials and supplies.

Access To More Talent

A speed rail system also means Chinese manufacturing companies have access to a larger pool of talented workers.  If it is fast and easy for people to reach the manufacturing plant they will be willing to travel greater distances.  That amounts a much larger pool of educated, skilled, talented workers.

Developed countries like the United States and European countries are investing in automation and more efficient technologies.  China will do the same.  However, in order to run high tech companies, you need highly talented workers.  if China can access a greater pool of talent, it will continue to have an advantage.

A fast transportation infrastructure is the basis of access to better talent, better raw materials and supplies and cheaper costs.  These are big advantages that other countries just can’t match.

It takes a lot of time and money to build a rail infrastructure.  While other countries are improving, China is already there and still improving.

2.  High road density.

Road density determines how easy it is to transport completed products to shipping ports.

It also determines how easily raw materials and supplies reach manufacturing plants.

A well-built network of roads reduces time and expenses in the manufacturing process.

Easy access to shipping ports means better reliability in meeting deadlines for supplying manufactured goods.

3.  Better economic connectivity between China and the rest of Asia.

In addition to a large and efficient network of railways and roads China has been working on other infrastructure factors as well:

Upgrades to 15 ports for better maritime access;

Construction and expansion of oil and natural-gas pipelines;

Expansion of fiber optics networks; and

Smoother customs processing

These types of efficiencies make it easier for other countries to do business with China.  If clients can save time, money and hassles in dealing with China, they will prefer to give contracts to China manufacturing companies.

4.  Big Investments In Automation

Chinese factories starting to pour money into automation…and there is tremendous scope to improve productivity. China became the biggest market for robots in 2013, buying 20% of all those made that year, according to the International Federation of Robotics.

Combined with the ease and efficiency China manufacturing companies enjoy due to the physical infrastructure, systems and administrative infrastructure, as China adds the benefits of automation, they are going to continue to have a powerful manufacturing sector for decades to come.