China Manufacturing Advantage Will Remain Strong In The Foreseeable Future

The China manufacturing advantage has been the secret sauce for millions of businesses around the world.  Some say there is no way this can continue.

Manufacturers in China are responsible for making everything from simple toys to the most sophisticated electronic manufacturing projects.  The reason China was able to get the contract for all these manufacturing projects is their ability to undercut any other country in terms of price.

Obviously, if a company can get cheap, but good quality manufacturing they will go with that manufacturer.

The problem with this scenario is that the average wage of workers in manufacturing plants in China is lower than almost any other country.  Chinese workers are in a deep state of poverty.  On the other hand, in the last ten years their wages have tripled.

Despite that, the average Chinese manufacturing plant worker is far below the average in some of the most poverty stricken countries in the world.  It is significantly lower than even in countries like Korea, Thailand and Malaysia.

The Chinese government realizes this problem.  They are implementing solutions like making it mandatory for manufacturing plant workers in China to be unionized when working for companies in wealthy countries.

This makes it more complicated for Western companies to use manufacturers in China.  Costs increase for them in their head offices, in the West and problems increase in the manufacturing plants in China.

If companies can get their manufacturing done in other countries without all the hassles, they will certainly take that route.

China realizes they can’t rely on marketing on the basis of dirt cheap labour.  Does this mean they are soon going to be less competitive?

No.  Not yet.

Strategy To Keep The China Manufacturing Advantage

First of all, wages for Chinese manufacturers are only going up in the cities.  Just a few miles out of the city is a vast network of villages with qualified people hungry for jobs.

Second, China already produces more STEM graduates (science, technology, engineering and mathematics) than any other country.  The productivity of the average Chinese manufacturing worker is improving very quickly.

Third, the International Federation of Robotics predicts China will be home to 40 per cent of the world’s industrial robots by 2019.  Again, China’s ability to produce more and better quality products is improving faster than any other country in the world.

President Hu Jintao has made closing the wealth gap a major plank of policy over the next five years.  China has embarked on an unprecedented journey to lift a significant proportion of the world’s poor into what we call the developed world.

With China’s overall industrial development strategy, the China manufacturing advantage will stay.  Manufacturing in China will remain competitive in the global market.  China will continue to dominate the world in manufacturing in the foreseeable future.  They will do it in a way that is good for Chinese workers and still remain a viable alternative for companies looking for cost efficiency and top quality manufacturing.

Give us a call. We’ll make manufacturing in China a simple, profitable, hassle-free experience for you:  Call 1-888-659-1018 or Email:  rbpande@arcadiasourcing.net

Sources:

China’s rising wages policy has a logical end game

China’s Manufacturing Advantage Is Here To Stay

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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.

Give us a call. We’ll make manufacturing in China a simple, profitable, hassle-free experience for you.

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Russian Scientists Suggested A New Technology For Creating Magnet Micro-Structures

 

A team of scientists from Krasnoyarsk Scientific Center (Siberian Department of Russian Academy of Sciences) and Siberian Federal University synthesized thin crystal ferromagnetic films and developed a technology for their shaping. Processed films can be used in electronic and spintronic chips. The results of the study were published in Thin Solid Films journal.

The team created films that are hundreds to dozens nanometers thick. The developed films are formed of iron silicides synthesized on a silicon substrate. Iron silicides are compounds of iron and silicon that usually have ferromagnetic properties when subject to certain temperatures. There are also non-magnetic iron silicides with unique optic characteristics that may be put to practical use.

Films like this are used as active parts in optic and photonic devices, as well as in integral electronic and spintronic chips. Thin ferromagnetic films open a lot of prospects for spintronics (an area of science that provides for the creation of information storage and processing devices). Devices like this consume less electrical energy and have higher operating speed compared to traditional electronic ones.

However, to develop such devices scientists need films to be specifically shaped. It means that a template has to be applied to synthesized films, and they have to be cut according to it. To do so, scientists use etching. It can be either wet (chemical) or dry (plasma, reactive-ion, or just ion). In the course of wet etching a film is placed in liquid – an etching agent that dissolves the rest of it. Before that scientists cover the films with "masks" using photolitography to set out required configuration. Such a mask protects the desired part of the film from solving. In dry etching the same result is achieved using a gas that destroys the material physically or chemically.

"We've broadened the application of this approach, extended it to new iron-silicon alloys, and showed that it works. We've also determined the speed of etching and developed a micro-device. The same methods may be used for the production of different structures in electronics, photonics, and other applications," said Anton Tarasov, a co-author of the article, candidate of physical and mathematical sciences, a scientific associate of Kirensky Institute of Physics (FRC KSC of SD RAS), and senior tutor at Siberian Federal University.

Scientists point out that a big advantage of the new films is not only their electronic and magnetic properties, but compatibility with the most popular technological semiconductors. It means, these films may be grown on bases made of silicon, germanium, and gallium arsenide. This will help the team obtain high-quality thin films with specific shapes and geometry in a simpler and more affordable way. Moreover, the obtained results increase the selection of materials that scientists may use to develop different devices.

"Using this technology, one can create spintronic or photonic devices, because iron silicides have properties applicable in these areas of science. Right now we are growing new films and studying the effects that depend on their topology," concluded the scientist.

The team worked in collaboration with scientists from Siberian State Aerospace University and Lomonosov Moscow State University. The research was supported with grants from Russian Foundation for Basic Research and Krasnoyarsk Regional Science Foundation, as well as with the grant of the President of the Russian Federation for the support of leading scientific establishments.

Source:  Russian Scientists Suggested A New Technology For Creating Magnet Micro-Structures