"Within one month our revenues had jumped over 50%."

Chinese Manufacturers

China is the world’s biggest exporter and manufacturer of a wide variety of goods. As a result, Chinese companies have become known to produce everything from computer chips to clothes to toys. In addition, Chinese manufacturers are known to produce in bulk at cheap prices, which is why Western companies have flocked to China in order to either set up their own production plants or outsource their manufacturing costs to a wide market of Chinese manufacturers. Due to government policy, China has acquired highly sophisticated foreign production facilities and through “localization policies” and also built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear reactors and satellites. However, most of its industrial output still comes from relatively ill-equipped factories.  A report by UBS in 2009 concluded that China has experienced total factor productivity growth of 4 per cent per year since 1990, one of the fastest improvements in world economic history.

One of the predominant industries in China is the chemical industry, which produces a large output of chemical fertilizers, plastics, and synthetic fibers. The growth of this industry has placed China among the world’s leading producers of nitrogenous fertilizers. In the consumer goods sector the main emphasis is on textiles and clothing, which also form an important part of China’s exports. Textile manufacturing, a rapidly growing proportion of which consists of synthetics, account for about 10 percent of the gross industrial output and continues to be important, but less so than before. The industry tends to be scattered throughout the country, but there are a number of important textile centers, including Shanghai, Guangzhou, and Harbin. China is also the largest producer of steel in the world producing 45% of the world’s steel in 2011, 683 million tons, an increase of 9% from 2010. As a result, 6 of 10 of largest steel producers in the world are in China. However, profits are low despite continued high demand due to high debt and overproduction of high end products produced with the equipment financed by the high debt.

As of 2010, China has become the world’s largest automotive vehicle manufacturer as well as the largest consumer. China’s automotive industry has been so successful that it began exporting car parts in 1999. As a result, multiple international automotive car manufacturers have set up large production facilities in China in order to take advantage of manufacturing costs and the consumer market. In addition, their is a huge Chinese manufacturing industry that is involved in producing car parts. Due to the high level of manufacturing activity that occurs in China, international trade makes up a sizeable portion of China’s overall economy. As a result, China’s global trade exceeded $2.4 trillion at the end of 2008, even at the height of the global recession.

Due to the high number of Chinese manufacturers, the level of competition in China is fierce. This has resulted in a high barriers to entry into the Chinese manufacturing market. While it was relatively easy to start a factory in China not long ago for any enterprising businessman, conditions have changed drastically in the last 10 years. The availability of credit for start-ups is low, due to the high level of funding that state owned enterprises capture from the state owned banks. As a result, many businessmen look to underground loan markets in order to help them meet their debt obligations. These loan markets charge outrageous interest rates ranging from 20-50% on loans, adding further pressure on Chinese manufactures. In addition, due to the low cost-bulk production system of China, Chinese manufactures hardly make any profits on the products they sell, and many Chinese manufacturers struggle to keep costs low and increase profits. Furthermore, the cost of labor is going up in China due to less people migrating to the cities from the countryside. Which adds another burden to Chinese manufactures.

Overall, while you can find a Chinese manufacturer for virtually any kind of product that is produced in bulk. It is quite hard to become a Chinese manufacturer. However, if you are looking for Chinese manufacturers, then you have come to the right place, and should consider check out our Globial B2B network. We have a business to business platform that lets you search for any kind of business in any country on the planet, including China. In fact, we have thousands of Chinese manufacturers that are looking for businesses to sell to. To get in touch with these businesses, all you have to do is log onto your Globial account, and in the Search tab, type in China under the Location tab. In seconds, you will have the largest and most comprehensive list of Chinese manufacturers on the web, for absolutely free. So come on down and start doing business in China today!

 

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Author:Globial International Business Team

The Globial International Business Team researches, analyzes, and reports on all things related to global trade and business.

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