For hardware China has the edge,
and will keep it for another ten years at least.
There are alternatives emerging which could challenge China’s dominance as the supplier to the world. Certainly in some industries, like clothing manufacture, for example, they have already seen their customer base move to lower cost countries.
But in hardware and technology, China reigns supreme and will continue to do so for at least ten years.
What could threaten China’s dominance?
India, Vietnam and other lower-wage alternatives have already started to build their manufacturing capabilities.
Additive manufacturing or 3D printing is enabling localised production for certain parts and industries and as the 3D printing platforms and materials develop this will continue to eat away at some of the traditional manufacturing.
Trade wars and increasing costs at home. Some people seem intent on a regression away from free trade, and towards protectionism. There is also the cost of living in China which has risen dramatically and quickly and means it is no longer all that cheap any more anyway.
But here is why none of these things will matter for the next five to ten years.
China has a body of skills and experiences unrivalled anywhere else in the world. They have been trained by the best the western world had to offer so they could produce the quality of parts demanded cheaply and quickly. They have absorbed and adopted this knowledge as their own. Can this knowledge not be passed on to suppliers in lower-wage countries? Yes of course, but not easily and not quickly, and as we got rid of our manufacturing knowledge base back home we might need to look to Chinese engineers and technicians to train the next wave.
China has economies of scale in supply chain. The sheer number of companies out here manufacturing both homegrown and foreign products, parts and components is incredible. The speed and reactivity in China today is so much faster than anywhere else. This kind of environment and ecosystem takes years to grow.
Chinese people are incredibly hardworking and driven to succeed. They have a very work oriented culture and mindset and love to make money. The Chinese are also very humble and keen to learn. There is also a great sense of optimism in China, and that gets a lot of people moving. These are traits very difficult to emulate and ultimately make for success.
Today there is nowhere else you can get an injection molded part or a complex assembly done so quickly and cheaply. There are many products which would struggle to be made at all in the rest of the world and many more which even though assembled elsewhere rely on Chinese suppliers for certain components. So if you need a part or product manufactured, China is still your best bet.
HLH, we make things for you…………