Territorial commodity structure of Chinese factories, trends of moving production in China from the southern provinces to the north and west, the shortage of energy resources, labor cost increase and increased production costs of factories in China.
Factories in China, located in the industrial provinces in China have territorial specialization. For example, the production of electronics, shoes and clothing for export is concentrated in the south of China, in Shenzhen and Guangzhou, and the chemical industry and heavy engineering plants are located in the northern and eastern regions of China.
Factories in China, as well as throughout the world, are built in convenient areas in terms of availability of raw materials, distribution, transportation, labor costs, energy resources. Naturally, the first provinces that began to flourish in the late ’80s and early’ 90s, became the eastern and southern regions, and now the development is gradually shifting to the north and west.
The main production enterprises and factories in China, are still located in the provinces of Guangdong, Zhejiang, Fujian, Jiangsu, but to date, such provinces as Anhui, Hebei, Heilongjiang, Shandong and Liaoning are going through a period of rapid growth in production and improvement their technical equipment .
It is due to the fact that the western and central provinces are inferior in terms of industrial production of the south-east and north, a few years ago, the Chinese government has taken and since 2000s began implementing a program of development of the western and central provinces, investing in local Chinese factories providing preferential long-term loans and a favorable tax regime to Chinese industrial enterprises.
In July 2007, it was decided to set up two new free economic development zones in Chongqing city and in the capital of Sichuan province Chengdu. There is no doubt that in a short time there will be a large number of Chinese factories with foreign investment in these industrial areas.
In recent years, there is a tendency of production moving from the southern provinces to the north and west because of the shortage of energy, cost of labor and increase of the daily manufacturing costs for the factories in China. Stationing the branches of large enterprises in the western (central) areas is currently more profitable and promising, despite the distance from the well-developed transport infrastructure of the eastern and southern provinces.
For successful business with China is important to determine which geographical position of the Chinese plant is preferred. The total length of the cycle of production and delivery, as well as the cost and method of transportation will depend on it.
We also recommend to take into account the above specialization of Chinese manufacturers, as when working with factories in China, it is important to have several potential partners who are ready to produce your order in case if something goes wrong with the company with which the contract has been signed.
Our experience with the Chinese manufacturers will allow you to choose the most appropriate type of cooperation in terms of the convenience of geographic location, working experience with foreign partners and production capacity of each plant in China.