The Unbeatable Price Advantage Of Manufacturing In China
Why Chinese Manufacturers Have A Production Advantage
Manufacturing in China continues to grow in popularity. In the past “manufactured in China” meant poor quality materials and workmanship but now that has changed…dramatically.
China is now a major economic power. Many things have changed since the government decided to allow international trade and actively pursue manufacturing contracts around the world.
If anything, China has always been known for its ability to produce products cheaply. In the past, “cheap” meant not of good quality. Now they are able to produce products at a much higher quality level AND cheaply.
Evolution Of Quality Manufacturing In China
In the beginning, the Chinese strategy was to underpay its workers and practically “steal” manufacturing contracts out from under more established manufacturers in Europe and elsewhere. Getting manufacturing contracts gave them the ability to set up manufacturing plants and train their workers.
In the next phase, the Chinese government sent hundreds of thousands of students for study abroad. Fully subsidized by the government, students gained the best technical knowledge directly from the countries they aimed to compete with.
When these students came back, they were given good jobs manufacturing simple and technically sophisticated products. Unfortunately, these students had theoretical knowledge but sorely lacked practical experience. This gave Chinese manufactured products a bad reputation among their clients.
Fortunately, the Chinese kept low-balling on price and companies kept taking a chance on them.
Ancient Chinese Secret Gives Manufacturers In China The Edge In Global Competition
Practice makes perfect.
While initially inexperienced, the students kept getting better and better at producing good quality products in wide variety of industries. Better and better companies began trusting them to produce the quality represented by their brand.
Along with the ability to get contracts for high level, high quality, high volume manufacturing came the acquisition of machinery and intelligence to compete in the world market for any type of product.
Low Pricing Strategy Leads To Even Lower Pricing
Their policy of providing an incredibly low price for manufacturing products is still continuing. Now, instead of banking on their ability to underpay their workers or use poor quality materials, the Chinese count on their workers learning to be more efficient.
They bid low. Often, the price they bid is lower than their own cost, by far. What they are counting on is their ability to reduce their cost of production through experience. And it has worked.
On its initial entry into a market, China first manufactures that product and sells it to their local market, cheaply. Because they have a very large population, manufacturing in China is always high volume. This gives them the practice they need to learn how to reduce their production costs far lower than other manufacturers who do not have easy, guaranteed access to a huge population base.
Their next step is to take on contracts for companies around the world for much lower than anyone else can provide. The ability to experiment and learn by manufacturing for their local market gives them the ability to develop systems for producing high quality goods.
The combination of being able to break into the market locally, then being able to provide high volume manufacturing services internationally makes them unbeatable. By manufacturing in China, companies around the world can provide the best quality products at the lowest price.
Manufacturing in China is the secret of success of many of the top brands in the world. China manufacturing companies allow them to make amazing profit margins and still provide high quality products.
Chinese manufacturers have the experience, intelligence, equipment and manufacturing facilities so companies feel confident that they will get the quality they require.
If you are looking to manufacture something, let us find the right China manufacturing company to handle your product. Every company has its area of specialization. We have the connections to know which company will be a perfect fit for your needs.
