China is the manufacturing powerhouse of the world. Samsung, Apple, Procter & Gamble, and Volkswagen are some of the topmost brands globally, with manufacturing facilities in China.
China is not just a manufacturing hub of developed nations; even emerging economies import large quantities of electronics and daily goods from China. Chinese products are found in prominence worldwide. While many attribute China’s competitiveness in manufacturing and packaging to its abundance of labor, in reality, many other factors contribute to the nation’s competitiveness.
Ever wondered “how China became a manufacturing hub”. Let’s take a closer look at what makes China the world’s best manufacturing hub for a wide range of products.
How did China become the factory of the world?
The population of China is the largest in the world. China uses this fact to its advantage and provides plenty of labor. China has provided favorable conditions ever since developed nations started focusing on finding regions to manage their mundane tasks. From land to raw material, China’s export policies have adequately suited other nations to bag the title of “the factory of the world.”
In 1980, the average annual salary was around $450 in China, which was about 50 times lesser than the average annual salary of an American worker. This huge wage disparity attracted American manufacturers to China, hoping to increase profit margins by moving production there.
China never missed out on the influence of American nations and laid the foundation for taking over the worldwide manufacturing industry by reforming its laws well before the 70s. Farmers were able to earn more profits by doing less labor due to significant reforms in rural land and thus moved to other jobs to earn a better living. A surplus of labor was therefore available at affordable costs.
To attract foreign investors, Guangdong’s Communist Party established several market-friendly special economic zones. Though initially, overseas Chinese came, European and American also started establishing their manufacturing plants in less than just a decade.
Volkswagen is one of the foremost companies that set up their factory in Shanghai in 1984. Just four years after them, Procter & Gamble established their first shampoo manufacturing plant and became a prestigious brand for Chinese consumers.
China has shown significant development since the 1980s and has formed specific manufacturing regions where dozens of companies have been established. Some popular industrial areas are:
- Electronics in Guangdong.
- Medical Equipment, daily goods, and mechanical parts in Eastern Shanghai.
- Chemical Products in Chongqing.
- Auto Components in Wuhan.
Chinese packaging supply chain network has the widest coverage.
China accounted for 28.7% of global manufacturing before COVID-19. The United States, Australia, the United Kingdom, Europe, and other Asian countries import many products from China. One of China’s top packaging companies is Asiapack. We offer a range of packaging services, including kitting and warehousing. With our custom bonded location, we can streamline everything better, and suppliers can get tax rebates and export clearance.
Reach us to kit your product in different packaging or any other packaging service.