Opting to manufacture products in China is a sensible business decision for most of the Western and the US companies. The benefit in China is way beyond simply having low-cost manufacturing and skilled labor. A qualified sourcing community, investor-friendly regulations and various shipping options are some of the finest reasons that make China the best place to start manufacturing your product. Whether it is a second or third tier market, almost all the markets in China offer promising business opportunities.
According to BusinessKnowledgeSource.com, some companies have reported savings as high as 50 percent in salary payments alone. For companies experiencing a shrinking market or loss of business because of an influx of competitors, overseas relocation can make a substantial difference in their bottom line, and perhaps even prevent a business from failing altogether. For businesses with tight budgets, this can be a great way to maximize their bottom line.
However, there are many issues that come with the China manufacturing. But if you can deal with the potential risks in a proper way, the rewards will be greater than the risks. In this blog, we are going to share some of the China manufacturing risks and the best possible solutions to handle them.
IP Security Risk in China–
Depending on your industry and your product, the security of your intellectual property can be a major concern in China. It is a well-known fact that China is a nation that poses a grave risk to IP. To be successful in China, companies should develop an integrated IP protection strategy that reflects the nature and extent of the IP problems they face and is grounded in a realistic assessment of internal goals and resources.
Cultural & Language Barriers–
Differences in cultural norms may be difficult to navigate and language barriers may complicate effective communication. Appointing an experienced China lawyer or a local China representative is perhaps the smartest way to overcome this problem.
Chinese-made products often suffer from poor quality. Foreign businesses should offer product specifications early on (before an order is placed). Include all the details, such as material, approved components, dimensions, color, finish, logo artwork, etc. A large number of manufacturing companies in China now produce items that perfectly match the US and Western quality standards.
From cheap labor and the manufacturing capability to take your product from raw material to final output, all at an affordable price are some of the multitudes of China manufacturing options available. Manufacturing a product in China is almost always significantly less expensive than manufacturing it domestically. In China, foreign companies can manufacture premium tech products as well as cheap, low-quality toys.