Moving manufacturing facilities in China or importing products from Chinese manufacturers can be a significant business decision. There are different advantages that we can get by obtaining products in China. Here are some of them:
- Proximity to Your Market: China is located in Far East, next to many neighboring countries. Producing in China is an advantage if the shipment cost is relatively insignificant.
- Existing Customer Interests: Customer may actually prefer that their products are made in China. They don’t want to pay the higher prices that are often associated with producing in the United States and other developed countries. Selling good quality products at lower prices can benefit your business operations.
- Lower Operational Costs: This is an often mentioned benefits of producing in China. There are many costs elements that may contribute to overall manufacturing costs. For highly labor intensive products, it is possible for traders to reduce costs compared to similar production process in the United States. Even salaries for management and technical professionals in China are lower or equal to low-level workers in the United States. Raw material costs in China are also lower due to proximity with sources. Chinese are also known as major producer of industrial tools, machinery and equipment. It means that production costs can be further reduced due to the availability of local manufacturing capabilities.
- Simpler Operations: Having a production facility next to our office can result in a more complicated business operations. Many manufacturers in China are able to deal with such complexity. By transferring manufacturing process in China, we are able to focus on the core business operations, such as R&D and marketing. Management objectives can also become more flexible.
Unfortunately, there could also be major trepidation among business owners about transferring their business operations to other countries, including to China. Successfully moving manufacturing facilities to other countries can be hampered by a number of obstacles. China Assured helps you to eliminate controllable risks, while effects of external uncontrollable risks can be lessened.
- Utility Costs: Energy costs in China can actually be quite high due to the presence of some hidden costs. This could particularly affect traders who are not aware of local billing structure. We provide information about different regional pricing of gas and electricity in China to reduce the overall production costs.
- Land Costs: Purchasing land is more difficult in China and foreigners are only able to purchase the right of operating on the land for predetermined amount of time. For this reason, it is advisable to work with existing Chinese manufacturers, instead constructing a production facility from scratch. Improper management of land usage could also add to overall production costs.
- Possible Legal Issues: Patent infringement represents a significant legal liability. China Assured ensures manufacturers fulfill requirements to prevent legal problems that may affect importers and traders. When it comes to litigation, China is unique. If we confront the Chinese government due to breaches of regulations, the prospect of legal success can be quite slim. China Assured has an extensive experience in Chinese industrial landscape and we are able to help you avoid common problems with local authority.
- Issues with Local Government: This factor can be quite significant when we have actual production facility in China. It’s important that we develop a proper relationship with local government. Again, we recommend you to work with existing Chinese manufacturers that have established proper relationship with local government.
- High Employee Turnover: Many Chinese employers offer work contracts that are good for only one year. It means that employees may work alternately between different employers. China Assured recommends multiple Chinese manufacturers with long-term, professional workers who are able to consistently deliver high quality products in the shortest amount of time.
- Language and Cultural Barriers: Language and cultural barriers between Chinese manufacturers and foreign traders are so wide that one could make an entire book about this subject. Chinese is a complex language and a full mastery may take years to achieve. China Assured has local professionals in the field who can completely diminish any language and cultural barrier. We provide recommendations on how to interact better with Chinese manufacturers and officials.