Why China Is "The World's Factory"

Why China Is "The World's Factory"

author: By PRABLEEN BAJPAI Updated May 18, 2021 Reviewed by MICHAEL J BOYLE
2022-02-17
Why China Is "The World's Factory"

I have been traveling a lot to China for the production of IoT products. This falls on the Engineering triangle. China can produce Quality, Fast, Cheap.

I feel all the answers about cheaper labor is missing the point of the question. Since the majority of the third world countries have cheaper labor. From most of Africa, South America, India, and so on... Cheap labor has already been pointed out. Here are a few more:

Mostly because it has a billion people, about the same as the rest of the developed world combined, but isn't yet developed enough to be heavy in service industries.

China has invested a lot in infrastructure. Factories have reliable power, good highway and rail system to port, and large modern ports.

Educated, young and reliable labor force. People that can read and a good primary school science education.

Stable government policies. Companies know from year to year what the government will do. No surprise revolutions, uprising, and riots.

Good neighbors. The majority of the Chinese factories are owned by Japanese, Taiwanese, Singaporeans and South Korean.

The economy of scale. If you are making shirts, you want to be near button factories, zipper factories, and so on.

About the Quality, time, Cost. You can only pick 2.

If it is Time and Cost:

A bulk of Chinese products are designed to be available fast and cheap. Therefore the "Good" suffers. And it's because of the fast and cheap, those items generally fail quicker than their other counterparts.

If you pick Quality and Time:

China has the capacity for quality items too, the bulk of electronics like Lenovo, Apple products come from China. They are generally high quality and available immediately. But those products are not always "Cheap." Let me ask you this? Do Apple products have this reputation?

China only makes whatever quality someone is willing to pay for. iPhones are made in China but you don't see people complaining about the build quality on them.

Lastly, when you see a product with "made in China" sticker, it's not all made in China. China usually is the assembly point for most products, the parts come from a wider range of places.