Re:The Lonely Future of Buying Stuff
by cepth on Wednesday December 27, 2017 @10:19PM
(#16020078)
This really depends on what kind of goods you’re trying to manufacture.
Speaking from firsthand experience, if you want to have anything with a circuit in it prototyped, picking a Shenzhen area factory to work with has many advantages. You can have new circuit boards printed and tested within a day. This kind of ecosystem may be hard to replicate elsewhere.
On the other hand, for many other physical products proximity to the end customer is becoming the primary concern. Consider that as real wages in China are increasing, you’re looking at a 20-30% wage increase over the last 4-5 years in China. This means that any cost advantage over other countries is rapidly closing. Chinese raw materials and electricity are no cheaper than in the rest of the world. Due to new factors like increasingly stringent environmental regulations, many of these other inputs are increasing in cost. (http://www.scmp.com/news/china/economy/article/2058175/chine...)
If I want to have a plastics part mass produced, there are a number of regions in the US where there is near-parity with China when you factor in shipping costs, insurance, tariffs, the costs of delays and defects etc.
For industries like textiles, there’s already been significant flight to India and Southeast Asia.
Speaking from firsthand experience, if you want to have anything with a circuit in it prototyped, picking a Shenzhen area factory to work with has many advantages. You can have new circuit boards printed and tested within a day. This kind of ecosystem may be hard to replicate elsewhere.
On the other hand, for many other physical products proximity to the end customer is becoming the primary concern. Consider that as real wages in China are increasing, you’re looking at a 20-30% wage increase over the last 4-5 years in China. This means that any cost advantage over other countries is rapidly closing. Chinese raw materials and electricity are no cheaper than in the rest of the world. Due to new factors like increasingly stringent environmental regulations, many of these other inputs are increasing in cost. (http://www.scmp.com/news/china/economy/article/2058175/chine...)
If I want to have a plastics part mass produced, there are a number of regions in the US where there is near-parity with China when you factor in shipping costs, insurance, tariffs, the costs of delays and defects etc.
For industries like textiles, there’s already been significant flight to India and Southeast Asia.