US-China Relations Impact on Economy

America and China are economically linked, two of the world’s largest economies, assisting one another with trade. This is a major income source and big advantage for countries that are short on specific materials.

China has the distinction of being America’s second biggest trading partner, its largest import source, and its third biggest market for exports. Undoubtedly, China is a massive market for American investors and exporters, due to its huge population and quickly developing economy.

Chinese Economy Remains Strong

Indeed, even following the global financial crisis, China’s economy emerged relatively unscathed – slowing down moderately after 2008. In spite of a huge Shanghai stock market crash and unpredictable fluctuations in the price of oil, China has sustained a stable economy not just for its citizens, but for other countries too. Data released from the China and U.S. Business Council shows that America is China’s biggest trading partner.

Manufacturing in America remains healthy in several respects, in spite of the common negative perceptions. While unemployment has risen notably over the last decade or so, output has not declined. Prices in America increased by thirty-three percent, from 1995 to 2008, however manufactured goods experienced a three percent price drop. Better still, salaries have increased in real terms, because cheap Chinese goods restrict inflation and allow wages to stretch further.

Benefitting from Chinese Manufacturing

U.S. businesses can benefit in many ways from outsourcing their manufacturing to China. China has inexpensive labor that allows them to manufacture more at a smaller cost. Typically, the rationale for considering Chinese manufacturing is based on lowering manufacturing expenses for certain products, particularly mass market products and other product lines, to remain competitive in current markets. Other businesses have outsourced their manufacturing to China to cater to their Chinese clients, or to sell on to a different country.

By carrying out some basic research, it is possible to build relationships with Chinese manufacturers to bring new products to the market. While cost is definitely one issue, speed is another one. For startup businesses that want to scale up their manufacturing quickly, China is the best option available. In particular, for startups in the hardware industry, Shenzhen is a major manufacturing resource. Business owners can access various tools, and benefit from the Chinese work ethos to complete projects faster.

Intellectual Property Right Protection

Intellectual property right (IPR) protection is one issue that many U.S. business owners worry about, when considering Chinese manufacturing. However, this is being dealt with by members of both nations. The Chinese central government has put a strong emphasis on IPR enforcement. All of the world’s leading 500 corporations, it is believed, have manufacturing or development in some capacity China. This specific IPR protection is of key importance, and this is being strictly enforced.

A healthy level of trade between America and China is advantageous for both countries. Mutual trade makes use of each side’s resources. Trading with China enables American businesses to participate in a growing economy. In turn, accepting outsourcing from America and exporting to America gives China the chance to reduce its’ rate of unemployment. Certainly, China is doing a lot to grow its domestic market and American companies are taking advantage in the manufacturing industry.

If your own organization would like to take advantage of all the benefits that outsourcing your manufacturing, join with a partner that has both the experience and expertise necessary to make your transition seamless and profitable.

Contact ITI Manufacturing if you are interested in taking advantage of all the benefits Chinese manufacturing can provide.

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