China is a manufacturing giant of a country, and their expertise and extensive supply chain give them a head start over everyone that will be difficult to overtake. Nearly everything is manufactured in China today, so how are the US to compete? Well, one thing that is different about the Chinese manufacturing industry is its complex interdependencies.
Take a smartphone for example; as a general rule of thumb, it will consist of more than 2,000 components. Some parts such as the touch screen are quite large, while others such as screws and capacitors are minuscule. Many of these different components come from different suppliers, but all of them seem able to provide parts at a minute’s notice. This is one of the main reasons that gives China strength within the manufacturing industry – its tightly knit network.
Traditional Chinese markets work on a very similar basis to this where you can get pretty much anything you need in one place. If you go to Shenzen, you will find a bunch of shops offering surface mount components for various electronics. It’s basically an industrial goods market where turnaround time for what you need is fast, and it’s not like anything else you’ll find around the world. Also, with the advancement of technology, there has been an increase in the amount of automated guided vehicles being used for delivery of these components, and the number of robots being utilized in factories in replace of people has risen also.
The numbers of workers being replaced by robots in China is quite significant, and the Chinese people are already showing their concerns, especially when it comes to low-skilled jobs. As robots replace people in these roles, the skill level of the workers needed in the factories to oversee the machines will rise, meaning more education and training will be required.
When it comes to manufacturing in the US, and whether it’s even viable to do this with things like smartphones, is questionable. Many of the components would need to be imported and then assembled once here. The cost of doing that compared to the cost of importing the whole smartphone all ready to be sold is probably quite high and would push consumer prices to an unacceptable level. So, it’s unlikely China will be moving from being leaders in manufacturing world anytime soon.
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