With advantages such as low-cost labour, strict quality control standards, tax incentives and a highly competitive business ecosystem, China has fast become the world’s factory. Below we look at each of these factors and establish how China was able to become a leading manufacturing country:

The main advantage of Chinese manufacturing is the ability to produce goods at a low cost. With a large population of 1.41 billion people and many factories, China can afford to produce goods at a lower cost than many other countries. China’s supply of workers is greater than the demand, which allows wages to stay low. This makes it possible for companies around the world to purchase goods from China at lower prices than they could get them elsewhere. Additionally, because labour costs are lower in China than in other countries, production time can often be faster as well. With the ethical issue of child labour and minimum wages in China, the situation is changing, with more factories reportedly increasing minimum wage in response to the rise of the cost of living.

Another advantage of Chinese manufacturing is its quality control standards. Many factories in China have strict quality control measures that ensure any products produced meet high standards before going out into the market. This means that customers can trust that the products they purchase from Chinese manufacturers are reliable and safe to use.

To promote the import/export industry, the Chinese Government implemented the export tax rebate in 1985. This rebate was aimed at boosting competitiveness of its export industry by removing double tax on exported goods.  Under this policy, exported goods had a zero percent value added tax (VAT) exemption. Products from China were also exempt from any import taxes. These policies made China an attractive destination for investors and companies wanting to produce low-cost goods for export.

China’s business ecosystem allows for highly efficient manufacturing capabilities due to well-developed infrastructure and strong government support. This ecosystem encourages collaboration among different stakeholders, from raw material suppliers to production workers and regulatory institutions. In addition, a comprehensive legal framework ensures the protection of intellectual property rights and further encourages innovation amongst those working within the ecosystem. Additionally, companies benefit from increased access to capital and increasingly cheaper technology that enables them to remain competitive in a global market. As a result, China has established itself as a leading player in the manufacturing sector.