China has always been the go-to for global manufacturing, but in recent years other countries have started gaining popularity as well. Places like India, Vietnam, and Bangladesh are working to increase their manufacturing export, while currently offering lower wages and cheaper products to overseas importers.

But China is still the hub of worldwide manufacturing—and for a good reason. China is “the world’s factory,” because it was the first and the best. We don’t expect that to change anytime soon.

In recent years, American sellers listened to the myths of “the risks of sourcing from China” and switched their sourcing to other countries. Now, though, they’re quickly switching back to China in droves in order to source quality products for their customers. The grass is greener in China.

What makes China the strongest option for your overseas sourcing?

1. Quality production

China has over 30 years of experience making Western goods. China was one of the first countries to implement large-scale, global factories. With experience comes quality and expertise.

In the beginning of the “Internet Age,” people believed that Chinese products were “cheap” or low quality. In the beginning years, this was true in part. Chinese factories were still working to balance costs and production.

However, 30 years later, most Chinese factories have figured out the process of creating quality goods quickly and efficiently.

But when you move away from China to lower-wage areas with new infrastructures, you’re met with the same troubles that Chinese factories were met with in the 1980s. Newness of process, less experience, and low wages together produce low-quality goods. It will take these other countries another few decades to catch up to where China is today in production experience and quality products.

Why Choose China Over Other Countries For Sourcing factory in front of chinese flag on gear

2. Manufacturing infrastructure

China has an established ecosystem built around the manufacturing process. There is a greater network of supply chain partners in China. This includes not only factories but also material sources, distribution centers, warehouses, and shippers.

Factories are popping up in other countries, but they also need other manufacturing partners in order to succeed. If two factories pop up, you need at least two goods’ suppliers and a shipper in tandem. This means these countries need to build an entire infrastructure of manufacturing from the ground up.

China already has the established resources and relationships needed for the production supply chain.

Moreover, Chinese manufacturing cities are already built up. They have subways and train systems so people can get to work, and they have homes and neighborhoods where workers can live comfortably.

Public transpiration systems and housing are less developed in other countries, where urban manufacturing areas are often still on the borderline of poverty levels. Poor economy and infrastructure often lead to strikes, delays, factory malfunctions, defects, and reduced production abilities.

China has the ecosystem and economy to maintain a strong and healthy manufacturing system.

3. Shipping opportunities

Because of China’s manufacturing ecosystem, they also have a strong infrastructure for the physical movement of exporting goods—especially via ocean. China has an enormous coastline that spans over 9,000 miles long. This coastline offers natural deep sea ports, totaling upwards of 172 ports.

This makes the logistics of shipping simple by offering nearby, convenient ocean freight options.

Many other emerging manufacturing companies are landlocked, which means shipping costs are extensive. Often, the costs of shipping from these companies drastically offsets the low wages they offer. India has large coastlines, but shipping would require canals and ports through Eastern islands, which is proving to be a logistical concern when working to reduce lead times.

China also has the most efficient customs procedures over India, Vietnam, and Bangladesh.

“China hubbing” also reduces transportation costs and increases shopping options and availability. This is when products from multiple shippers are brought to a central “hub” in China. From there, the goods are sent out in larger shipments to the final destination.

A Tompkins survey found that half of respondents send their products through a Chinese consolidation center before moving to a U.S. distribution center; they do this as a means of saving money and reducing shipping emissions.

4. Worker population

China has the largest population in the world. This means that there are a high number of available workers. This is critical as the manufacturing industry suffers from extreme levels of turnover. Overseas factories are struggling to keep and maintain their workers.

China’s population means that there is always a wide talent pool from which factories can quickly pull to ensure minimized delays. Other countries have significantly fewer available workers. For example, Vietnam has nearly 6% of China’s total population.

Thus, even though current wages are low in these countries, the supply for manufacturing workers is high. As these workers become even more in demand, their prices will increase in tandem.

India has a comparable population to China, and their cost of wages is slightly lower. However, India’s productivity is also about half of China’s. This is likely due to the fact that the GDP per capita is much higher in China, and GDP is directly linked to productivity standards.

5. Higher output

Because of the greater manufacturing infrastructure and the higher number of workers, Chinese factories generally tend to be larger and more efficient. This is especially true as a number of Chinese factories have been around for decades, growing and expanding as their clients do.

This experience allows them to work faster to produce higher yields. They also have greater scaling capacities. This, in turn, begets reduced lead times and fairer minimum order quantities.

Why Choose China Over Other Countries For Sourcing gears reading regulations compliance

6. Social compliance

Because China has been in manufacturing for so long, they have already worked out certain standards for compliance on a national, industry, and individual basis.

In years past, China had a number of social compliance complaints with “sweatshops” and unsafe working conditions. Because of these concerns, the majority of Chinese factories cracked down on their compliance. Now there are greater regulations and standards in place to avoid these damaging concerns.

Even one hazard can completely ruin a factory. With such severe competition in Chinese manufacturing, large-scale factories aren’t willing to run the risk of even a few months of a shutdown.

Learn more about maintaining social compliance here.

7. Improved service

Because Chinese production competition is so fierce, producers have to find unique means of differentiation. With an increase in supply of factories comes greater quality in the demand

A number of factories turn to high-quality customer service and relationship building as a way of standing out in a crowd of competitors. They develop relationships with their clients on a deeper level as a means of retention and word of mouth acquisition.

As a seller, especially if you’re a smaller company, this is an unbeatable advantage. Attention and care from your manufacturer is the key to high-quality products, discounted rates, reduced lead times, and an overall strong supply chain.

8. Economic size

China is the second largest economy in the world. A strong economy means a stronger manufacturing field. With a flourishing economy comes a better quality of living and improved business partnerships. This means that your factory can have more resources and opportunities to grow and scale alongside you.

Partnering with a company in the second largest economy also means increased globalization. If you decide to sell globally, China is one of the strongest markets to tap into. If you already have manufacturing and supply partners in China, you have greater access to a significant customer pool.

Sourcing in China can lead to selling in China.

The Bottom Line

When looking for a manufacturing partner, you want:

  • High-quality goods,
  • A significant production infrastructure,
  • Shipping and partnership opportunities,
  • A population of potential workers,
  • High output with fast delivery,
  • Social compliance,
  • Service-based relationships,
  • And a strong economic backbone.

China is the only current country with the experience and expertise to ensure the greatest manufacturing possibilities.

If you want to build a relationship with an overseas manufacturer, contact Ask Idea Sourcing now.

We can provide supplier assessment services to ensure you find the perfect production partner for your needs.

Contact us now to get started.