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Everything You Need to Know about Manufacturing in China

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On August 17, 2024

It is therefore not surprising that China is referred to as the ‘world factory’, China manufacturing is well known for several factors like low cost of labor and manufacturing, higher capacities for production and good Export Marketing prospects.

China, which shipped 19 percent of the world’s production last year, exported the same to the United States 18 percent. Now, $34 billion worth of products pay a 25 percent Chinese tariff, introducing increased production at foreign locations for numerous companies.

Opportunities and threats of China manufacturing

It is therefore important to understand several advantages and disadvantages that you are likely to come across when sourcing products from China before you start. The task to choose the right supplier determines the further experience of your business, so you have to make the right choice for your company.

Here are some reasons why you should manufacture your products in China:Here are some reasons why you should manufacture your products in China:

Low cost of production

The advantage that can never be overemphasized regarding manufacturing your products in China is that you can be able to minimize the cost of your products, without necessarily having to compromise on the number of products you produce. This means that the net profit becomes high and you have more money to pay on other sections of the business.

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Market accessibility

This is because when manufacturing in China, the company has an opportunity to easily attack new overseas markets. If your products are under process in a specific country like China then definitely people over there are going to show interest in your products.

Discounts

China manufacturers are competent in offering their customers products at relatively cheaper prices when large quantities are ordered for. This is because China can get cheap labor and most of the time have large factories that continue to produce manufacturing products.

They are numerous hence one can choose from –

Currently manufacturers source their products locally and if you think you want to have your manufactured items to be local, then you might lack the option to choose from due to the availability of many manufacturers. Still, in China due to the great number of various manufacturers operating in various industries, you can select the one suitable for your company.

Despite the fact that there are so many benefits of involving manufacturing companies in China, there are also demerits as illustrated in this paper.

Language barriers –

The language issue is a big problem when dealing with manufacturing infrastructure in China, especially if you do not understand the language or the customs. As for the language, it is suggested that if you have no knowledge in this language you better address the specialized translator which will make the process much easier. The business culture in China differs a lot from the western business culture and as such one needs to put this into consideration.

Quality control –

Sourcing and production of quality goods is rather challenging when dealing with China manufacturers. You are not there mostly or at all, so you do not really know the quality of the products. Sometimes from the samples given you might get an idea, but until the final product is produced and dispatched people really get to know. About quality assurance, you should maintain your product to be of high quality by either hiring a company to do so, or you could travel to the factory to make sure.

Having a record of poor protection of a company’s intellectual property – a downside of operating a business in China. Trademarks, plagiarism and copyrights are issues which you have to be very sensitive with especially on your products and with your manufacturer.

Key Chinese Manufacturing Hubs

The main manufacturing belt of China and all the seven major ports are concentrated in a few regions as shown in the following figure. These include:

Guangzhou: Sited on Pearl Delta River with access to Taiwan it is a significant provider of automotive, electronics, and petrochemical industries.
Hong Kong: A global hub for various huge business segments; education, testing and calibration services, medical devices as well as other technologies and communication.
Ningbo: Ningbo lies to the south of Shanghai; therefore, it is a favorable location for logistical points. Some of the manufacturing industries include; chemicals, electrical machinery & equipment, IT & Tele-communication devices & equipment.
Qingdao: Located on the shore of the Yellow Sea, Qingdao has attracted multitudinous manufacturing enterprises of automobiles, biopharmaceuticals, building materials and chemicals, electronics, machinery and metallurgy and petrochemical sectors. It is also among one of the biggest trading centers for garments as well as textiles.
Shanghai: Shanghai is not only the financial center of China but also the home to many sundry industries such as steelmaking. It also emerges as a major production base of automobiles, micro computers, mobile phones and plastics.
Shenzhen: The second busiest port in the world, it is one of the leading manufacturing hubs of electronics and electrical appliances. Other manufacturing industries in Shenzhen are personal computers and peripherals, electronics, and telecommunications.
Tianjin: Tianjin is the biggest manufacturing center of northern China which supplies eleven eastern provinces and Mongolia. It is where such industries as textile and mechanics are found in China.

The Chinese Manufacturing Process

Where and how does the process of manufacturing products involve China? Your company should prepare for the following:Your company should prepare for the following:

Sourcing:

Starting the outsourcing process involves the following; the identification of the right Chinese factory capable of producing the goods of your company. This I know calls for research and investigation.

Communication and negotiation:

Once you have selected a manufacturing partner, you are required to establish a communication line and to come to an understanding on a deal which will be to the benefit of all the parties involved.

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Specifications and samples:

When signing the contract for the products you are to provide the factory with more elaborate details on the product. This might consist of sending samples or prototypes of the products to the factory to match. In return, the factory should be expected to give you samples of the intended product before it is produced.

Production:

If the factory samples are okay, then the factory is at liberty to commence manufacturing. Manufacturing must be made in accordance with a production timetable that was agreed to by all.

Quality assurance:

There should be inspection activities in the process of manufacturing to check and confirm if the product meets or complies with the set quality standards, and also at the end of the manufacturing process.

Transportation and Distribution for Made in China

This way of managing the supply chain brings the following process issue to most U. S. companies when utilizing China manufacturing. Furthermore, organizations have to understand how to contain and transport finished goods back to the United States, along with customs clearance on such products.

In the end

This is due to the fact that when hunting for manufacturers in China that suit their brand, mark the price and quality that these manufacturers will be offering, it is a challenge. Before commencing the search for manufacturers, there usually are some key parameters: the specific product required to be manufactured, materials it should be made from, the intended selling price for the product, and exactly how many of the product are required to be manufactured. If indeed you are aware of all these factors, then you can go out in the market looking for manufactures that shall fit your company.