How is China so Cheap?

This is the engineering lecture room CR4.

Economic Gibberish is down the hall and on the left, room G7.

I was just wanting peoples view on buying parts. Engineering does involve buying parts. It's part of the supply chain. I don't understand costs that are told to me by people in the supply and it makes me wary of going down that route. When I am promised the world by someone, I am quite wary. I'm just asking for views on the subject.

If this discussion is about manufacturing techniques/management, that's fine. Please leave politics at the door.

From my perspective, there are two significant contributors to the "Cheapness" of China (for the same quality of output, so I'm not talking about the "knock off" product.).

Firstly, the general cost of labour is significantly less than you indicated. Minimal superannuation, leave entitlements and so on. Historic wages was $5 per 12 hour day compared to $100 per 8 hour day in Aus and so on.

This is further compounded by their supply chain also being supported by the same wage structure, so the labour component of the materials used was also less than we would see.

The second is the economic drive that the country has. The legislated emphasis is on their series of 5 year plans and while individuals may feel insignificant or mistreated, they realise the country is benefiting from their actions. To me this is similar in context to what some people call patriotism.

Economically, their expectations for standard of living will bring about internal changes to their level of competitiveness but that is still far away. Consider what happened to Japan between the late 1940s and 1990s and how their labour and exchange rate advantages are now significantly reduced.

Incredibly cheap, untrained labor aided by incredibly cheap, substandard materials, allowed China to offer cheap products in quantity, with questionable quality.

They could afford to absorb the rejects and didn't have to worry about the environment.

Those times may be changing. Let's hope so.

Part of the cost model is indeed due to subsidies. Many of those are not by the Chinese Government, but are handled regionally.

At the moment.................it's primarily competition.

They're not real happy about it either. What goes around, comes around.

In asian countries men and women are physically less stronger than in europe or america. As a result for many jobs more men are required compared to europeans. Also in europe due to WW1 & 2 many men have died but in asia there were no such loss of manpower and employment is given in many countries based on racial,religious,regional as well as on the basis of political affiliation to solve unemployment problem of political supporters as there is no social security.