China is home to approximately 1.39 billion people, which makes it the most populous country in the world.1 The law of sup the supply of workers is greater than the demand for low-wage workers, wages stay low. Moreover, the majority of Chinese were rural and lower-middle-class or poor until the late 20th century when internal migration turned the country's rural-urban distribution upside-down. These immigrants to industrial cities are willing to work many shifts for low wages.2 China doesn’t follow (not strictly at least) laws related to child labor or minimum wages, which are more widely observed in the West.3 However, this situation seemeased theireases in the cost of living.4 As of Jan. 2020, ’s minimum hourly rate is 22 yuan ($3.16) per hour or 2,480 yuan ($355.70) a month.4 In , the rate is 2,200 yuan per month ($315.55) and 20.3 yuan... See full list on Industrial production does not take place in isolation, but rather relies on networks of suppliers,ponent manufacturers, distributors, government agencies, and customers who are all involved in the process of production throughpetition and cooperation. The business ecosystemin China has evolved quite a lot in the last 30 years. For example, , a bordering in the southeast, has evolved as a hub for the electronics industry. It has cultivated an ecosystem to support thudingponent manufacturers, low-cost workers, a technical workforce, assembly suppliers, and customers. (AAPL) take advantage of China's supply chain efficiencies to keep costs low and margins high. Foxconn Technology Group (a -based manufacturer of electronics) has multiple suppliers and manufacturers ofponents that are at nearby locations. For manypanies, it's economically unfeasible to take theponent... See full list on Manufacturers in the West are expected toply with certain basic guidelines with regards to child labor, involuntary labor, health and safety norms, wage laws, and protection of the environment. Chinese factories are known for not following most of these laws and guidelines.3 Historically, Chinese factories have employed child labor, have had long shift hours, and have not provided the workers withpensation insurance.3 Some factories even have policies where the workers are paid once a year, a strategy to keep them from quitting before the year is out. Faced with mounting criticism, tnese government has claimed to institute reforms that protect workers' rights and provide for fairerpensation. However,pliance with the rules in many industries is low and change has been slow. Additionally, environmental protection laws are routinely ignored, enabling Chinese factories to cut down on waste management costs. See full list on The export tax rebate policy was initiated in 1985 by China as a way to boost thepetitiveness of its exports by abolishing double taxation on exported goods. Exported goods were subject to zero percent value-added tax (VAT), meaning they enjoyed a VAT exemption or rebate policy.7 Additionally, consumer products from China were exempted from any import taxes. These lower tax rates helped to keep the cost of production low, enabling the country to attract investors andpanies looking to produce low-cost goods. See full list on China has been accused of artificially depressing the value of t to provide an edge for its exports against similar goods produced by U.S.petitors. China keeps a check on the appreciation of t by buying dollars and selling yuan. T was estimated to be undervalued by 30% against the dollar in late 2005.11 In 2017, t appreciated 8% against the dollar, a move that experts say came about after former President Trump threatened to label China a currency manipulator.12 However, this trend reversed and t weakened against the dollar beginning in June 2018 when the U.S. imposed tariffs on Chinese goods. On Aug. 8, 2019, China's central bank lowered t to 7.0205 p April 2008.13 The weaker yuan makes Chinese exports more attractive and is seen as China's response to its trade warwith the U.S. See full list on Pundits have wondered if China will lose its spot as "the world's factory” as other emerging economiesoffering cheap labor dull China'spetitive edge. However, the availability of cheap labor is just one of many factors that have kept the "Made in China" label on so many products purchased by consumers around the world. It will take more than low labor costs for emerging economies to set up a business ecosystem that canpete with China's. For some time toe, China will be "the world factory” with its low production costs, huge labor pool, vast talent base, and business ecosystem. See full list on
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