China has the world’s largest export economy, and in 2017 was said to export $2.41 trillion worth of goods. We just have to look around at the things we own to notice that Chinese products are everywhere.
Many of the products we know, use and enjoy are imported from somewhere around the globe, because not all our demands can be met by the domestic market.
So why should we be importing goods from China?
Let’s take a look at five profitable reasons to do so:
1. Reduction in costs
When importing goods, reduction in cost is a benefit for both businesses and consumers. Why? China can manufacture large quantities of products in a short time frame, for a fraction of the cost.
This leads to businesses being able to make a higher profit. When produced domestically, profit margins tend to be lower because of the cost of equipment, a place to manufacture, and staffing is higher.
Importing goods means that businesses can focus on purchasing the product, and then re-selling it at a higher price, but still, offer consumers a good deal due to the larger quantities produced.
2. China has high productivity
So how is China able to keep up with such high demand? The answer is simple (and in the sub-heading) because China has high productivity and efficiency.
Plus, wages in China are cheaper, materials are more accessible, and the Chinese are masters in mass production, all these factors play a part in increasing your bottom line.
Also, to many people’s surprise, Chinese production lines are more refined and organized than their fellow Western businesses. The Chinese know their stuff when it comes to business!
3. Market expansion
Being able to save on production gives companies a greater chance to expand the number of products they can sell to consumers, as well as to maximize output and reach further afield to other countries.
This is especially true when offering a product that is not easily found in a country, as it makes the product more desirous, and therefore creates a need to produce more for the demand.
This links perfectly to an entirely separate issue; the truth behind Starbuck’s China marketing. You may find this of interest.
4. Importing goods from China helps U.S. jobs
Many people think that importing goods results in job losses, but this just isn’t the case. For a start, we have to remember all the work that goes on before production even starts.
A team of people had to come up with the idea, the design, and financing (amongst other things) before manufacturing as even considered. This, of course, means that U.S. jobs were created to fulfill these roles.
In fact, did you know that importation is responsible for 16 million jobs in the U.S.? That’s pretty impressive.
Beneficial for both economies
As mentioned before, the availability of choice, at a lower cost, allows American expenditure to be higher than it would otherwise be. It also means that Americans have a greater choice available to them.
Importing goods from China benefits their economy too. This is because profit is made on both sides; the more orders placed, the more China needs to distribute, and the more jobs need to be created to keep up with demands.
If you’re interested in business and would like to read more on the subject, click here.