Chinese Manufacturing

Chinese Manufacturing

Manufacturing plays a large role in the global economy, and technological advances in the industry have nudged it even farther up the financial food chain. Because of advanced digital communication, commerce has discovered and is utilizing a new venue. Automation is beginning to play a larger role in assembly lines, and assembled components and finished products have taken the place of the raw materials that were once the mainstay of world-wide trade and commerce. Chinese Manufacturing has assumed a lead role in developed nations in the export of manufactured goods. As a matter of fact, China is the world's largest exporter.

Four hundred of the Fortune 500 companies rely on China as a source for their manufactured goods. China produces a plethora of products for exportation. They produce food-related products that run from spices to health food, to fertilizers and manure for growing food. They produce consumer electronics that include cameras and photography equipment, mobile phones and their accessories, and major appliances. They produce textiles from clothing to carpet to the labels affixed to the inside of garments. They produce toys of wood, plastic, and electronic components, etc. Every imaginable product most likely has a source in China. As a matter of fact, China has cornered the market on many products, including umbrellas and Christmas tree lights.

There are many explanations for China's popularity as a producer of manufactured goods. There is a massive labor force, with over one hundred ten million work candidates. Until recently, they have been an inexpensive resource, as China's minimum wage falls between one to two hundred dollars a month, on average. There is also some truth behind the rumored Chinese ethic of working hard to improve one's lot in life. All of these factors contribute to an inexpensive source for goods for buyers around the world.

There are indications that this trend of China's domination of world manufacturing may be drawing to a close, however. Quality-related scandals in recent decades have resulted in the vow of quality inspectors to raise standards. Workers, aware of the higher expectations, have begun to realize where their wages fall in world rankings and have begun to voice their displeasure. Government officials have promised to raise minimum pay rates drastically, thirteen percent each year, from 2011 until 2015. China's manufacturing industry has already experienced a negative impact as a result of this. Companies cannot afford to pay employees the higher wages with the money contracted for from their buyers. Unless the buyers begin paying more, this will create an escalating cycle of lost workers and increased production expenses.

There are other factors that are contributing to China's declining rank in world manufacturers. Rising energy costs have added to production costs and Chinese laws for population control that limit families to one child will result in a smaller workforce in the not too distant future. These factors and the demands for higher wages equal higher prices for buyers that will be passed along to the consumer.

Up to now, Chinese Manufacturing has provided a cheap source for products needed around the world. Only time will tell if they will be able to continue to supply buyers with what they need at the right price and maintain their manufacturing status.

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Chinese Manufacturing