Made in China appeared everywhere in the past decades. Also, as international laws protected the consumer more and more, many Western prestige brands had to write it on their own products. But why Made in China and not, for example, Made in India? Why it had to be China?
There are three key reasons:
1. Long term vision: infrastructures and production machinery are always being built and updated. The Chinese government invests really a lot on internal mobility and this allows for production to be moved further into the countryside (where manpower and other costs are sensibly lower) to later ship through the ports in the East or through air hubs such as Wuhan. Chinese companies are also pushed into updating their factories so they can keep the pace with the local competition and with the continuous increase of pay of their staff. Since they cannot reduce the salaries, they are forced to improve efficiency, so they usually end up investing money to manufacture at lower costs or increase the quality of the products – perhaps specializing in a niche in the mean time.
2. Manpower: the low level manpower is cheap and available in huge amounts: specialists and technicians are also a lot, thanks to the high importance given to education in Chinese culture. Chinese are almost a billion and half and always in constant competition with each other since young. Life costs are generally lower and as a consequence, a Chinese worker is usually paid less than a worker from a developed country. That does not mean that their life is much worse, though, since the costs of life are also significantly lower. Furthermore, the factory owner is usually providing food and lodging to migrant workers. PCB factories in Shenzhen’s countryside are filled with small lodgings for the workers (usually coming from the poorest provinces of China), so that they can earn money without spending them all – and thus they can make some savings for their family or for their home, that perhaps are thousands of km away. This applies to any company – private or state-owned. This allows the business owner to spend less to pay the workers (as food and housing costs are less significant when done for several people at once) so they can lower the price for their customers without actually exploiting their workers. Workers, on the other side, can use this to keep almost entirely their salary at the end of the month, since their life expenses are taken care of by the company.
3. State Planning: using international agreements and planning legislation to develop a strong economy and eventually reach the status of developed country is the third key factor.
Although many know that in China it is possible to manufacture at lower costs than in Europe, a lot believe that it is because of an international plot that allows Chinese to “bypass” the laws. That’s not exactly what’s going on. In China there are environmental laws, and some of them may be less restrictive than in the West, since China is still a “developing country” – just like India: for this reason, the developed countries place on them less restrictions. This allowed a fast industrialization that now is giving space for stabilization: China is getting ready to become a developed country and accept its consequences. The state planning is really useful for big projects, by offering huge incentive and support to the companies able to bring China forward technologically and economically.
Soon we will see that “Made in China” will no longer be considered as “low quality stuff of any kind”, but become a quality brand on its own for specific categories of products (for example the hi-tech electronics). Perhaps “Made in Vietnam” or “Made in Thailand” will be few of the new “Made in China” for the future, although it will take some time before the transition will actually finish. Not too long ago, “Made in Japan” did have a completely different meaning than today’s. Sony was one of the companies that promised to free Japan and Japanese products from the “low quality, high quantity” stigma imposed by foreigners. They made it. Afterwards, something similar happened with “Made in Hong Kong”.
Considering all of this, it does not look insane to say it’s finally the time of China to step into the spotlight with its Proudly Made in China.