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Chinese Manufacturing Trade Benefits

Contrary to myth, there are still many benefits that US businesses and US consumers gain from Chinese manufacturing and the current trade agreement. In the 21st century, the volume of international trade is still taken for granted by some, while continuing to bring surprise to others. The truth is, US manufacturers, and other countries who can produce goods and services at a lower cost compared to what we can produce domestically, truly obtain benefits through trade. With the “flattening” of our world, as Thomas Friedman describes it in The World is Flat, the global economy plays a key role in the economic health of the nations engaged in it. The global economy is, and always has been, one of the reasons for the robustness of the U.S. economy. As the US continues to develop its economic relationship with China, one of its largest trading partners, things can only get better.

Direct Global Trade Benefits

Global trading offers many advantages. For example, global trade promotes stability in international relations as trading partners have a vested interest in maintaining peace. It allows trading partners to benefit from each other’s relative weaknesses and their own comparative advantages, thus maximizing profits from production and experiencing lower cost goods than can be purchased domestically. Granted, as the global economy continues to evolve, different industries in countries around the world will be affected.  Like the old marketing story about buggy whips at one time being THE manufacturing business to be in, eventually that business had to naturally give way to something else.  When companies can sell their products to an international market, they are able to scale up production and lower production costs. In addition, global trade opens the market to global competition, ideally improving quality while keeping prices down to benefit all consumers.  Of course, this is notwithstanding the politics of tariffs, export incentives and rebates, or currency manipulation and other actions that can get in the way of a truly free global marketplace.  Finally, global trade promotes the exchange of, not just goods and services, but also, ideas and innovations that can and have brought benefit to the world.

China- The World’s Factory

China is currently the world’s second largest economy and the number one trading partner of the Unites States.  So much so, China has become known as “the world’s factory.” Over the last 30 years, cities throughout the country have developed a strong Chinese manufacturing supply chain, comprised of component manufacturers, a low-cost workforce, highly trained engineers and technicians, and assembly service suppliers. In addition, lower tax rates on exported goods keep the cost of production down. For these reasons businesses worldwide have found it profitable to outsource manufacturing to China.

Chinese Manufacturing Benefits

Several benefits await the U.S. company that takes full advantage of Chinese manufacturing.  First, China manufacturing is less expensive especially when labor is a high percent of a product’s cost to manufacture.  In these cases U.S. businesses can acquire manufactured goods at a substantial percentage less than the cost they would pay to produce or procure them domestically. Smaller companies can also take advantage of the opportunity to outsource large-scale manufacturing that they do not have access to here in the USA.  The scalability is virtually unlimited.  This eliminates the need to take a chance and build larger manufacturing facilities only to let them sit idle when demand lags.  Because China has actively nurtured its manufacturing industry U.S. businesses can find any type of service, material, or method they require.

At ITI Manufacturing, we’re proud to be headquartered in Texas near Houston.  We’re also proud of the companies we have helped thrive by sourcing and managing the right China-based manufacturing situation.  We continue to position ourselves as a leader in Chinese manufacturing, liaison and partnership services to North American-based companies that need equivalent or superior level quality goods delivered at a lower cost.  We are here to do one thing: Help our clients take full advantage of all of the benefits China manufacturing has to offer.  If you have decided it is in your company’s best interest to investigate Chinese manufacturing call us at 800-574-6823, or contact us online now for a complementary product evaluation and quote.

By | 2017-05-25T08:12:23+00:00 May 25th, 2017|Chinese Manufacturing|

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