The Made in China Myth
As soon as most individuals notice the ‘Made in China’ sticker on an item, they instantly associate it with inferior, crass, badly made, shoddy and unattractive goods. Unfortunately, the ‘Made in China’ label still brings to mind phrases like ‘not built to last’ and ‘cheap imitation’. Suffice to say, this stereotype is more than a little unfair.
In reality, China is the manufacturing base of the world. Virtually all luxury brands get a significant percentage of their product lines produced in China. Moreover, some of the world’s largest tech companies with products that many individuals use daily, such as Samsung and Apple, owe their success to Chinese outsourced manufacturing.
In Dong Guan, the Gionee factory is a spacious, technologically advanced industrial facility, not a third world sweatshop. It has production floors that manufacture all components in house, forty-eight completely automated robotic SMT (Surface Mount Technology) lines, R&D and design centers at all levels, strict quality control checking areas at every stage, assembly lines encompassing every category, and thousands of staff, who have accommodation in the factory itself. The premises also has basketball courts, banks, supermarkets and other outlets.
After Samsung, Gionee is the world’s biggest phone brand, with respect to open market revenue. In 2012, they sold 2.5 billion USD worth of cell phones. Now though, Gionee and other similar Chinese companies have new ambitions. They do not wish to be a faceless manufacturer or knock off brand that caters to the Indian market. Instead, they want to be a big brand name themselves, so Indian brands are having to switch to lower tier manufactures. Gionee is just one of the multiple manufacturing power houses in China that drive the world economy through the production of quality goods.
Made in China is Good for US Economy
Perhaps even more surprisingly to the average consumer, when American consumers purchase Chinese made products, most of the cash spent remains in America itself. Overall, just 2.7 percent of American consumer spending goes on goods manufactured in China. In contrast, the vast majority of consumer spending, 88.5 percent, goes on goods manufactured in America (including services). Interestingly, even that statistic is deceptively generous. While items marked ‘Made in China’ comprise 2.7 percent of American consumer spending, just 1.2 percent represents the cost of these imported products.
Therefore, essentially, for each dollar spent on goods marked ‘Made in China’, fifty-five cents goes towards American produced services. That is to say, the American content of Chinese produced items is roughly fifty-five percent, which is far higher than it is for imports overall. The reason for this is that there are bigger wholesale and retail margins on consumer clothing and electronics, compared to most other services and goods.
Furthermore, products manufactured in China are usually big mark-up products, such as televisions and DVD players, or even many lower end items, such as footwear, plastics and T shirts. This means that, in percentage terms, these products contribute more to the American economy than items made, for instance, in Japan or Germany. This fact should give ethically minded shoppers more confidence to purchase Chinese merchandise. Better still, given that Chinese products only comprise 2.7 percent of American consumer spending, US shoppers are less likely to have to pay more for Chinese goods, due to the increased cost of labor in Chinese factories.
Made in China Means Savings For Your Organization
Despite Chinese manufacturing contributing much to both the American and global economy, it is still common for the label ‘Made in China‘ to have negative connotation. However, the fact is that many companies and organizations are utilizing Chinese manufactured goods to save expenditures, increase production and benefit in many other ways.
If you think Chinese manufacturing can help your organization, ITI Manufacturing has both the experience and results to help in an way. Contact us today for more information on how to make Chinese manufacturing a viable solution for your business growth.