China’s manufacturing output is set to pass the $5 trillion mark in 2022.
Manufacturing in China has steadily been on the rise throughout the last decade. This sector even saw a rise in overall production in 2020, showcasing the Chinese manufacturing sector as one of the most robust and powerful segments in the world economy.
China has built on its early success and now finds itself with the infrastructure to manufacture and distribute goods around the world. This opens up opportunities for small businesses worldwide to use Chinese manufacturing and distribution services to lower their overall production costs.
Want to learn more about why businesses worldwide flock to China for their manufacturing needs? You’ve found the perfect blog. Here are twelve reasons why you should consider using distribution services in China.
1. Fewer Regulations
Regulations can often be expensive and time-consuming to pass within the manufacturing industry. This is why manufacturing your goods in China can help save you the headache of trying to work around the stacks of labor and manufacturing regulations. China is incredibly lenient in this regard, helping you get your product made in a much shorter space of time.
There are still safety regulations in place to ensure facilities are safe for production. However, corporate and governmental red tape is significantly cut down. This can help save you both time and money at the same time.
These regulations allow you to enter the Chinese manufacturing market as quickly as possible. With less red tape to worry about, you can focus on the quality of your products and nothing else.
2. Lower Production Cost
The number one reason for shifting manufacturing to China in the past was the low minimum wage. This was a quick way for businesses around the world to lower their labor cost and decrease their overall production costs.
China is home to over 1,4 billion people, meaning that there are tons of people to employ in the manufacturing sector as demand rises. The growing supply of workers also ensures that wages remain quite low, allowing businesses to keep production costs down over long periods.
While minimum wage in China has steadily been on the rise in the last few years, the cost to employ Chinese workers is still significantly cheaper than in many parts of the world. When paired with the infrastructure and experience that China has to offer, it does not make sense to manufacture your products anywhere else in the world.
3. Increased Productivity
Lower labor and production costs can help boost productivity. This is because businesses can use the same amount of money to hire more people in China than in other countries. While this can help boost productivity, manufacturing in China comes with a host of additional productivity benefits as well.
China has fewer regulations and red tape, helping you save even more time and money during the production process. In addition to this, the Chinese manufacturing industry can quickly adapt to changing circumstances. This means that if you want to scale up production for a specific amount of time, China is the easiest place to make that happen.
Chinese manufacturing facilities are also set up to provide manufacturing and distribution services for both small and large businesses.
4. Logistics Services
The production process is not as simple as just making products. The production process begins by cementing a reliable supply chain that can deliver parts and components to the main facility. This process relies heavily on local logistics services to help keep things running smoothly.
China has incredibly efficient and reliable logistics companies that can help you deliver and store products on your behalf. These services are often included in most supplier agreements. This means that the supplier you choose will include transportation costs to make sure that everything arrives just on time.
Just-in-time logistics is a process in which raw materials and components arrive at the production facility exactly when they are needed. This allows you to receive and use components without having to worry about where to store them in the meantime. Chinese suppliers are experienced in this technique and can help minimize your logistics costs in the process.
5. Efficient Ports
China is home to some of the largest and most efficient ports in the world. As the manufacturing hub of the world, Chinese ports are used for transporting trillions of dollars of products throughout the world. This has led to them developing efficient and cost-effective ports.
The ports in China have been regularly serviced and upgraded over the last few decades. These upgrades have helped the ports keep up with demand but have also helped reduce the overall costs to import or export goods.
The biggest port in China is the Port of Shanghai. However, the Port of Shenzhen is responsible for most of the electronic exports. This is because the manufacturing city of Shenzhen is home to some of the biggest manufacturing companies in the world.
There are also several other efficient ports around the country. The availability of ports helps make shipping reliable as you won’t need to worry about backlogs.
6. Global Shipping Solutions
While China may not be as central as the United Arab Emirates, the country is still well positioned for global shipping. The country is incredibly close to the United States, its largest trading partner. This makes production for American businesses incredibly effective as they can get their finished products shipped to them overnight.
China is also home to some of the best distribution companies in the world. These companies can help develop a distribution plan to get your products worldwide. This can help ship products from China throughout Europe and Africa within a few days.
This places China in the center of the manufacturing world. China is also building new highways to enable new shipping routes from China directly to major cities in Europe. These new routes are designed to further reduce the cost of shipping while making the entire process as efficient as possible at the same time.
7. Global Expansion Opportunities
While local economies around the world are on the rise, the global economy is where all businesses want to be. The ability to distribute your product in multiple markets can help you boost the growth of your business in a much shorter space of time.
Manufacturing your products in China gives you access to the global market. This is due to the global shipping solutions and efficient transportation services that are based in China. The Chinese manufacturing industry has already built the logistics infrastructure to distribute products around the world.
China has some of the best airports, ports, and highways in the world. This means that you can easily ship your products from China throughout Europe and the world overnight.
Companies like Apple make use of this infrastructure to distribute their products directly from China to countries around the world. Since the infrastructure has already been built, leveraging it for your business is more accessible than ever before.
In this way, you can get access to the global market at a much more affordable price than if you were to produce your products elsewhere.
8. Reliable Supply Chain
When it comes to production, the supply chain is the most important aspect to consider. This is because any disruption to the supply chain can cause production delays. If you’re manufacturing in a single location to distribute around the world, a simple shortage can cause worldwide sales to stand still until that part is replaced.
A great way to build a strong and reliable supply chain is to keep things local. Having local suppliers reduces the overall risk of disruptions as logistics and transportation is kept at a minimum. Manufacturing in China makes this even easier as there are tons of component manufacturers, logistics companies, and suppliers throughout the country.
The widespread availability of suppliers makes it easy for you to locate and procure the various components and parts that you need. The availability of local suppliers also means that replacing a supplier can be done in a shorter space of time. This reduces wasted time to keep production on schedule.
One of the most important factors to consider when looking for a manufacturing partner is their scalability. This is because you want to find a partner that can keep up with your demand as it rises. If a supplier can’t handle future demand, you will have to spend time and money replacing them down the line.
This is where China can leverage its experience and infrastructure in the world. China is home to thousands of factories that can effortlessly scale up production as your demand rises. Working with a manufacturing and distribution service can make this even simpler as they can help manage the entire process for you.
10. Chinese Business Culture
China has dominated the manufacturing space for a long time. This dominance has evolved into a business culture that is leagues above the rest of the world. Manufacturing experts and professionals in China are experts in their field and can help you streamline your entire process.
China is home to a wide range of suppliers, manufacturers, distributors, and logistics companies. These companies can work together to develop the best solution for your business. Regardless of how big your company is, the Chinese manufacturing industry can develop a solution for your exact needs.
11. Taxes and Duties
China has always been fair and friendly when it comes to taxes and duties. These taxes and fees were kept at an absolute minimum to encourage people to invest in China. The Chinese government introduced a tax rebate policy in 1985 that cut a variety of taxes to make the market more friendly for international investments.
China also removed the value-added tax on exported goods by including a VAT exemption policy. In addition to this, all consumer products from China were listed as exempt from import taxes. This made it even cheaper for businesses to move their manufacturing to China and save money in the process.
These low tax rates made it incredibly easy and affordable for businesses around the world to manufacture their products in China.
12. Local Currency
International exchange rates are incredibly influential in the global market. The exchange rate can help drive investment into a particular country, making it a useful tool to drive economic growth in the area. China has managed to keep its local currency fairly low, making it perfect for businesses around the world to invest in the country.
The lower currency makes every dollar invested more valuable. This effectively makes the cost of labor and production even lower for international businesses. The Chinese government keeps a close eye on the exchange rate for their currency, with all exchanges being under their control.
This allows the government to keep the currency as stable as possible. This stable currency helps create a stable environment for people to invest in the country without fear of their investments becoming worthless.
Chinese Distribution Services
China is the world’s factory for a reason. From a thriving business culture to a robust and affordable supply chain, the Chinese manufacturing industry shows no signs of slowing down. This means that outsourcing your production and distribution services to China can help streamline your business and increase your productivity at the same time.
If you’re thinking of moving your manufacturing and distribution to China, it’s essential that you work with a trustworthy partner to help guide you every step of the way. Contact us today for more information on how you can effectively move your manufacturing to China.