Chinese manufacturing plays a significant role in international politics and economics. Many nations outsource its labor needs to foreign countries like China. This sample essay explores the pros and cons of manufacturing in China.
Benefits of manufacturing in the United States versus China
Politicians argue that outsourcing manufacturing to Asia helps improve Sino-American relations (also called Chinese-American relations). But that benefit is underscored by the rewards American would reap if it maintained manufacturing inside the country.
One of the more obvious benefits of manufacturing in the United States as opposed to China is that there will be no language barrier. Workers will be able to easily and effectively communicate with vendors and business associates without worrying about comprehension.
Another benefit of manufacturing in the United States is locality. If companies manufacture in the United States, they are more likely to be able to talk to them in person and physically meet with them to discuss the conditions of your business relationship. While some manufacturers have excellent English skills, that is certainly not the case for everyone.
U.S. versus Chinese manufacturing and quality control
Another benefit to manufacturing in the United States is companies may be able to have a better grasp on the quality control, as they may be able to visit the facility and oversee the process in action (Jolly 2014). In addition, it will be easier and faster to receive samples or to return products or fix any problems if they should occur. This might be harder to accomplish if companies choose to manufacture in China.
While some Chinese manufacturers may send you samples or proofs before manufacturing more, this process costs more money for postage and shipping and takes more time to execute (Romaine 2014). Manufacturing in the United States also ensures that you can get your product out there faster, as the time between when the product is shipped and when you receive it goes down significantly.
Import and export costs associated with Chinese manufacturing
Still another obvious benefit to manufacturing in the United States is it saves a significant amount of money on shipping costs. If a manufacturer only has to send the product across the country rather than across the world, the cost is cheaper. And
And, as consumers change their behaviors and demand more convenient shipping and delivery methods, it is much more likely that shoppers will have the option to pick up their products directly rather than having to pay to have them shipped.
It is not unusual for shipping from China to the United States to cost a few hundred dollars and then for another thousand dollars to incur to use a freight forwarder to send pallets across the country (Jolly 2014). By manufacturing in the United States, corporations have the opportunity to save money on shopping costs.
The downside of manufacturing in the United States versus China
The major downside to manufacturing in the United States is that the price can end up being higher than they would be in China. The extra cost comes from both the higher price of American materials and the higher cost of American labor. American companies have to furnish insurance, workers’ compensation, and withhold taxes, all very costly payroll requirements.
But fairness isn’t considered in China’s economy, and social injustice impacts employees’ benefits and wages. In 2013, the highest monthly minimum wage in China was only two hundred sixty-seven dollars (Jolly 2014). This is startlingly low, despite the fact that Chinese law requires that the minimum wage is enough to meet one’s daily needs. In the United States, the cost of labor is approximately four times higher (Jolly 2014).
U.S. reliance on foreign goods to make products
Another problem that people often encounter when they manufacture in the United States as opposed to China is the cost and availability of materials. A significant amount of the materials used to manufacture in the United States, ironically, come from other countries. For example, t-shirts manufactured in the U.S. rarely are made from American clothing. The materials are imported, and companies simply put sew them together.
Because of this, manufacturers sometimes have to wait to receive shipments of materials from other places that are necessary to create your products (Shaw 2010). When this happens, there can sometimes be little to no notice that there will be a delay, which is incredibly frustrating and inconvenient. It is imperative to a successful business that products are manufactured, delivered, and sent out to customers on time.
Other times, manufacturers in the United States will sometimes require consumers to collect and purchase the raw materials for the products themselves and send them to the factory to be produced (Waksman 2015). Another downside to this can be that if not all the materials are used, the buyer must stock them and find a place to store them.
Benefits of manufacturing in China
The main advantage of manufacturing in China rather than in the United States is the lower cost. Both labor costs and material costs are lower in China than in the United States. As previously stated, the cost of labor in China is four times lower than it is in the United States, making it a much cheaper and more appealing option (Jolly 2014).
Despite shipping costs, it is cheaper all together to manufacture in China. It is often said that the only way to save money and remain cost effective while manufacturing in the United States is if shoppers are ordering over five thousand copies of a company’s product (Jolly 2014). The only reason for this is that it will lower the cost per unit; doing that for manufacturers in China will not have the same effect as the shipping prices are fixed and increase with volume.
While some worry about language barriers, it does not always have to be a major problem or obstacle. Many China-based manufacturers have excellent English communication skills and a command of much foreign linguistics. Others who may not often have United States representatives to act as the middleman during communications between themselves and their clients.
The downside to manufacturing in China
One of the most common complaints about manufacturing in China is that lack of ability to facilitate proper quality control. There are some manufacturers in China who will send proofs and samples before you have to commit to or order more, but this process can cost a lot of both time and money.
The cost of shipping the samples and the time it takes to send things back and forth can be frustrating and tedious. In addition, it is not unheard of to have to wait an entire month to receive your products after the manufacturer has shipped them. These kinds of mass shipments are often accompanied by a ten percent loss due to shipping damage. This can all be avoided by manufacturing your goods in the United States.
Safety, financial, and language concerns regarding China-made products
There are also some financial problems that can arise when manufacturing in China. First of all, when placing overseas orders, clients are often required to put down a thirty percent deposit just to begin production (Shaw 2010). This can often make up for the money you could save by manufacturing in China in the first place. Another financial problem that can come about when manufacturing in China is that it is also common to be required to pay for the order in full before it even leaves to be shipped. These issues can make it a disadvantage to manufacture products in China.
Another issue that can arise when manufacturing in China are safety-related. It is important to be diligent and attentive when it comes to safety rules and regulations in the manufacturing of your products. The United States is sometimes much more strict with safety rules and regulations than other counties may be (Mitchell 2014). Foreign safety regulations may not always align with those in the United States.
When this happens, there can be dangerous and hazardous effects to the health and safety of others. In China, there is no equivalent to the Occupational Safety and Health Act, which we have in the United States (Fisher 2012). Therefore, it can be a safety risk to you, your employees, and anyone who receives your products if you are not totally sure about the safety regulations with the manufacturers who produce your products.
Some major problems some people have with manufacturing in China are ethical concerns. Cath Paraggio, cofounder of the swimwear company NoNetz, decided to keep the company’s manufacturing in the United States after conducting market research on labor in China. “They were unemployed, underemployed and upside down on their mortgages, even though they had master’s degrees and were highly educated.” (Mitchel 2014). Many are uncomfortable doing business when they are not absolutely sure that the people doing the work for them are being treated well and compensated fairly. When manufacturing overseas, it is sometimes extremely difficult to be sure of these things.
In conclusion, there are both a large number of benefits to manufacturing in both the United States and in China. Some cite the language barrier as an issue while others believe that it is easily overcome. In some cases, there is a severe language and cultural barrier that can prevent the business relationship from being happy and effective. Other times, there are bilingual representatives who can read and write both languages to ensure that the relationship is smooth and amicable.
One benefit to manufacturing in the United States is that governments are better able to keep a close eye on quality control. The closer someone is to the manufacturer, the easier it is to visit the factory in addition to talking to and meeting the people. This helps to ensure that everyone is on the same page and that optimal results are achieved.
Another benefit is that the cost of shipping can significantly decrease when you are only shipping something across the country rather than across oceans and continents. However, manufacturing in the United States has its downfalls, too. One major downfall is the heavier price of goods and services in America. The materials, labor, and cost of operations are all higher in the United States.
“Pros and Cons of Manufacturing in China”. New Zealand Trade & Enterprise. New Zealand Trade & Enterprises, 2014. Web. 19 Jan. 2015.
Fisher, David. “Bringing manufacturing back to the USA: Pros and Cons in Sourcing, QC, and more”. Asia Quality Focus, 29 Mar. 2012. Web. 19 Jan. 2015.
Jolly, Tom. “China Vs. The United States; Where to Manufacture”. The League of Game Makers. The League of Game Makers, 26 Feb. 2014. Web. 18 Jan. 2015.
Mitchell, Ben. “Manufacturing in China- Advantages and Disadvantages (Part 1)”. Lombard Global: International Business Consultants. Lombard Global: International Business Consultants, 2014. Web. 19 Jan. 2015.
Romaine, Ed. “Comparing Manufacturing Costs: USA vs. China”. ISDDD. Integrated Systems Design, 2014. Web 18 Jan. 2014.
Shaw, Sarah. “Pros and cons of manufacturing in the USA vs. Overseas”. The Entreprenette Gazette. The Entreprenette Gazette, 3 Feb. 2010. Web. 19 Jan. 2015.
Waksman, Karen. “Domestic vs. Foreign Manufacturing”. About Money. About.com, 2015. Web. 19 Jan. 2015.