Why is Everything Made from China - Cheap and Quality

Source: DHgate, Tag: Holiday Decor

Products made in China are used by the whole world because of them being cheap but good quality.

China's second-largest economy globally is famous for producing low-priced but high-quality goods. Most of the goods put on sale on DHgate and offline stores across the globe have a “Made In China '' label. A country that had been regarded as undeveloped for several decades is now at the forefront of industrial development.
Today, more than 350 industries are actively developing and manufacturing low-priced goods in China, including textiles and clothing, furniture, construction materials, electronics, petrochemistry, pulp and paper, car manufacturing, pharmaceuticals, etc.
They are sold across the globe using DHgate and other similar platforms. In 2022, there will be around 145 large companies in China. Goods manufactured in Europe, the USA, Japan, and other countries don’t stand in the competition. Have you ever wondered why all made-in-China goods are so inexpensive yet of high quality? Let’s analyze.
Free Special Economic Zones For Companies
The creation of special economic zones is responsible for China’s economic and manufacturing success. In the late 70s and early 80s, PRC laid the foundation of economic reforms. It launched a program to open special economic zones (SEZs) for companies. In 1980, China created five special economic zones in Xiamen, Shantou, Zhuhai, Shenzhen, and Hainan Island. These SEZs are far from Beijing and Shanghai.
These locations are in close proximity to Hong Kong, Taiwan, and Macau. All these regions had developed economically in previous decades. So, these SEZs were developed with a clear vision to invite national and international companies to set up manufacturing units where they can get all facilities required to launch the production of goods.

• • Special Economic Zones have a different legal status from other territories in China. Depending on the type of SEZ, each of them has different kinds of requisites and benefits.

  • Enterprises with foreign investments in China receive additional tax holidays (2 years from the moment they start making profits. Until three years, companies have to pay 50% less tax on their profit).

The main purpose behind the development of special economic Zones in China is:

• • Development of high-tech industry,

  • Expanding transport logistics systems,

  • Accelerate the process of the production of “made in China” goods and substitute imports,

  • Promote tourism in China,

  • Speed up the production of numerous goods,

  • Create jobs,

  • Attract foreign direct investment, and encourage local companies to invest money in infrastructure development,

  • Support local industry and

  • Stimulate innovation.

SEZs in China helped-

• • Attract 45% more FDI from different countries,

  • Increase the country’s gross domestic product by 22%,

  • Increase export by 60%,

  • Create 30 million new jobs.

Currently, SEZs in China include-

• • 14 coastal regions (Yantai, Shanghai, Weihai, Wenzhou, Guangzhou, Dalian, Lianyungang, Nantong, Ningbo, Tianjin, Fuzhou, Qingdao, Qinhuangdao, Zhanjiang, North Sea, and Yingkou city) and

  • 7 prominent cities (Shantou, Kashgar, Xiamen, Shenzhen, Zhuhai, Hainan, and Khorgas)

  • 10 Pilot-free trade zones (Shanghai, Guangdong, Tianjin, Fujian, Henan, Hubei, Liaoning, Sichuan, Chongqing, and Zhejiang)

Apart from this; China has-

• • 13 free Special Customs Supervision zones,

  • 14 state-level border economic cooperation,

  • 90 technical and economic development units,

  • 168 hi-tech parks,

SEZs of China allows foreign companies and investors to-

• • Comfortably register a business as per the law applicable in the chosen SEZ,

  • Choose the desired number of accounts necessary to run a company successfully. They can open accounts in China and abroad,

  • Get affordable-priced rented offices,

  • Hire local and international employees,

  • Obtain all the necessary permits to run a business legally, and

  • Quickly choose a local business partner when creating a joint Chinese-foreign enterprise.

SEZs have encouraged many companies to set up their manufacturing unit in China, start manufacturing a wide range of goods, and sell them globally using DHgate.
Inexpensive and skilled labor Force
Currently, China is the undisputed manufacturing leader of the planet. Either you sell “made in china” goods or use commodities that may have Chinese components. While India (1.417 billion) and China (1.426 billion) have the same population, China produces ten times more than India. The country accounts for over 50% of the world's industrial production.
The sharp growth of industrial production in China over the last 45 years is outstanding. In 1980, the USA was almost five times bigger than China in industrial production. In 2010, China overtook America to become the No. 1 manufacturing hub in the world- all this is possible with the availability of a cheap but highly skilled workforce.
In 2021, the country had 746.52 million working professionals working in different industries. Because of this, China's trade surplus in manufactured goods amounts to a whopping $1 trillion (¥7,272,800,000.00).
An average Chinese professional works six days a week, 10-12 hours a day with no unnecessary holidays, and earns $1,145 to $20,245 (¥7,410- ¥1,31,000). The availability of a cheap labor force attracts foreign companies to China. They start manufacturing units in the country comfortably, produce goods using inexpensive professionals, and sell them globally using DHgate.
Superior Logistics & Transportation System

When companies set up their manufacturing units, they have the following questions in mind-

• • How to ensure an uninterrupted supply of components and raw materials to factories?

  • How to take care of all workers?

  • How about testing and timely shipment of products?

  • How to work with clients from different countries?

  • How to deal with issues raised in different languages?

Fortunately, China has an excellent transportation and logistics system. High-speed trains in the country reduce travel time by 60%. Deep seaports capable of handling huge ships and millions of containers are always ready to help companies. Freight trains in China can carry goods thousands of miles quickly, such as the YiXinOu from Xi’an (China) to Barcelona (​​Spain).
Even online sellers find great resources to sell manufactured goods globally. DHgate is a leading B2B Cross-border E-commerce market platform. DIANE WANG, a successful entrepreneur, established this E-commerce platform in 2004. It has-

• • 40+ warehouses in China and 10 in foreign countries,

  • 2.4 million sellers across the globe,

  • 46 million enterprises,

  • Customers from more than 223 countries,

  • 37 million listed products,

  • Partnerships with famous companies such as American Express, DHL, FedEx, MasterCard, Visa, UPS and

  • DHgate supports 71 currencies and 13 languages.

DHgate is a convenient platform for all companies that want to sell products in China and elsewhere. They need to register themselves on DHgate, list products, optimize them for increased visibility in results, pick clients, and start selling goods across the globe. DHgate logistics setup quickly ships goods to the desired destination.
As a result, the overall product shipment cost gets reduced remarkably. Customers get low-priced “made in China” goods in different countries, adding more comfort to their lives.
With DHgate, companies don’t have to spend too much on developing logistics mechanisms, payment gateways, product marketing, etc. The platform provides all these facilities, making it easier for them to sell low-priced goods globally.
Superior Infrastructure
The Chinese government has made all the necessary arrangements that allow factories easy access to land, electricity, water, buildings, warehouses, roads, the internet, etc., in just one call to the local administration. China is famous for its ease of doing business. It scores 77.28 out of 100 points on this parameter. As a result, Chinese and foreign entrepreneurs love setting up manufacturing units or factories and producing low-priced goods.
In comparison, although the USA's infrastructure is excellent, the cost of goods production is high. While in developing countries ( such as India, Indonesia, Philippines, Vietnam, etc.) where production cost is low. However, substandard infrastructure derails business activities. Massive power outages, social unrest, and political interference often disturb the production of goods in these countries.
China is an obvious winner here, offering low production costs with outstanding infrastructure support. Additionally, China has a lower crime rate and a stable government, making it a safer choice for such humongous investments. Therefore, China is a business-friendly country.
It has the world's busiest container ship port in Shanghai, automated and driven by robots, autonomous vehicles and laced with 5G. There is no such port in any country, lending China a huge edge in terms of lower logistics costs. Hence, China is the first choice for global manufacturers instead of other emerging economies. All these play a vital role in the production of low-priced products in China.
The use of Modern technologies and Tools For Goods Production
China’s economy has grown by 9%-10% yearly for the past 30 years. Since 2010, China has been ranked second in the world in terms of GDP, behind only the USA. Modernization of the Chinese economy has been a long-awaited dream of the Chinese government.
Chinese Companies use the latest tools, technologies, artificial intelligence, machine learning, and robotics to automate the production of goods at affordable prices. As a result, “made in China” products are cheaper than commodities manufactured in other countries.
Tax Incentives
The Chinese taxation system is quite flexible and leads to the production of low-priced goods in the country. Have a look at the principal taxes for business in China:

Type of tax Bid Term

Corporate Tax 25% one time per year

Tax on dividends 20% one time per year

Stamp duty 0.33% one time per year

VAT 13% Every month

Employee social insurance 37.66% Every month

Savings funds on property tax 14% Every month

(apart from social security).

China tax relief is a preferential tax policy offered by the central and local governments to encourage certain economic activities, support disadvantaged business groups, and promote exports. From an investor tax perspective, tax breaks help save the cost of production and increase profit margins. Since China began reform and opening up in the late 1970s, the country has adopted a series of preferential tax policies.
It helps the country attract a large amount of foreign capital and foreign-invested enterprises, effectively promoting the adjustment and optimization of various industrial structures and manufacturing high-quality products at low prices. Chinese products are 10%-20% cheaper than American, European, and Japanese products.
So, customers in different countries prefer "made in China" products and save significant money every month. Companies can purchase affordable goods from DHgate and resale in different geographical locations with reasonable profit margins.
Final Words
China is a global manufacturing hub, which produces amazingly high-quality, but inexpensive products. As a result, the global market is full of "Made in China" products. Why is everything made in China so cheap- this question strikes the mind of companies in developed and developing countries. The availability of SEZs, reasonable labor force, state support to business organizations, the use of modern tools and technologies, cheap raw materials, and other factors help manufacturing units in China to produce low-priced commodities and sell them across the globe using Dhgate and other similar online platforms. Companies engaged in B2B E-commerce find DHgate useful as it helps them efficiently sell goods to clients worldwide while maintaining a decent profit range.

Frequently Asked Questions
Why are all US products made in China?
Just look at the back of your iPhone, iPad, or MacBook. You will see a message- "Assembled in China," designed by XYZ in the USA. Many Americans, including former president Barack Obama, wonder why American companies have moved manufacturing factories to China.
In simple words, the scalability, speed, and efficiency of Chinese manufacturing are superior to anything that US manufacturing is currently capable of. With a manufacturing unit in China, companies have to spend less money on producing goods. All facilities available in SEZs, tax benefits, cheap workforce, and the latest tools and technologies make goods manufacturing in China more affordable than in the USA.
In fact, 70% of all US companies own manufacturing units in different Chinese cities. They can manufacture low-priced commodities here and sell them to any country using DHgate. The cost of goods production is higher in the USA because of the expensive workforce, lack of necessary infrastructure, and no tax relaxations.
What would happen if the US stopped buying from China?
The tug-off for greater control over trade between the US and China has intensified in recent years. The USA has been imposing sanctions on several Chinese companies, implementing tariffs on many "made in China" products, and forbidding American companies to stop making business contracts with Chinese companies.
In response, China has introduced counter-sanctions on certain US business entities. The trade war between the world's No. 1 and No. 2 economies is unfortunate. It is negatively affecting both sides.
Many small industries will go bankrupt if the US stops buying from China. Retail stores will shut down, and many ordinary Americans will lose access to inexpensive but practical "made in China products." This will affect the quality of their life, fuel discontent in society, increase unemployment and create disturbance in the business community.
China might sell US debt or Treasuries in response, accelerating the dollarization of the world economy. Due to the trade blockage between two major economies, China will lose $347B (approx 3.1%) of its GDP. The USA's economy will decline due to such an unfortunate development.
Why did US manufacturing move to China?
Compared to the USA, China is a more fertile ground for the speedy development of manufacturing units. Although the US is the most developed country, its expensive workforce, excessive bureaucracy, inflexible business taxation systems, insufficient logistic system, and the high cost of transportation of manufactured goods stop it from becoming a global manufacturing hub. On the other hand, China makes it easier for companies to set up their manufacturing units in the country, produce low-products and sell them globally with the help of DHgate.