In fact, most products are currently produced in China, including CNC machined parts. If you check your iPhone, your bicycle, your car, all metal parts are likely to be CNC machined in China. The main reason why so many overseas customers process parts in China is the price. CNC machining in China is very cheap, which will directly reduce the cost of finished products and make them highly competitive to return to the local area. Many people want to know why CNC machining in China is so cheap compared to other countries. As an experienced Chinese machining manufacturer, we think the main reasons are as follows:
1. Low processing raw material cost
The Chinese government understands the needs of the world economy for raw materials (for example, steel, aluminum, plastics) very early and has created the necessary infrastructure for various industries. The Chinese government has cooperated with African countries, Pakistan and Sri Lanka to obtain various natural resource infrastructure projects. This ensures that Chinese industry can operate with cheap raw materials throughout the year.
2. Low processing labor cost
China is a large developing country with a large population (according to statistics at the end of 2017, more than 1.39 billion people). The huge human resources with the required manufacturing skills lead to low labor costs. Of course, mechanized operations such as CNC machining are not affected by fluctuations in labor costs, but China’s low labor costs can reduce variable costs, which makes our processing services cheaper.
3. High processing productivity
Although Vietnam, Bangladesh, Thailand and other countries have lower labor costs than China, the manufacturing technology and factory quality are very low. Especially for CNC manufacturing, it mainly relies on advanced equipment and skilled workers. Due to our huge labor force and complete supply chain, CNC machining factories in China are more productive and more flexible than other countries.
4. Complete processing supply chain
No matter what industry you belong to, you can easily find the relative supply chain, thereby greatly improving production efficiency and reducing costs. For CNC manufacturing, there are many factories in the CNC supply chain. They can provide raw materials, sub-processing services, and surface treatment services to support these CNC processing workshops. A complete supply chain reduces the final cost.
5. Low profits increase
Finally, in addition to the cost of processing parts, we only increased a little profit. In China, there is an old saying that "small profits will bring multiple sales." Most Chinese CNC machining companies maintain low profit margins and make up for the gap through subsequent sales growth. This is because the competition in China's CNC manufacturing industry is very fierce, and people can always find cheaper alternatives, leading them to lower prices to maintain the competitiveness of their products or services.
In fact, in recent years, the income of CNC manufacturers has been decreasing. Many people tend to invest in real estate rather than manufacturing because manufacturing in China is difficult and unprofitable. In any case, we believe that'Industry is the foundation of the economy' and will continue to improve our CNC machining skills to support our customers.