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Outsourcing Manufacturing To China Makes Sense At 6.81 Yuan A Dollar

It’s no surprise that outsourcing to China has become a trend in the industry. The fact of the matter is that China produces the largest amount of engineers in comparison to any other place in the world.

The figures are so stunning, that even Indian engineers are left in the dust. The number of engineers produced every year in the mainland is 350,000. You can imagine the entrepreneurial nature of the talent pool, working up to 12 hours a day and six days per week, without fail. 

With respect to increasing costs, it makes sense to outsource manufacturing of product lines – this holds true whether the industry is fashion, IT, or the pharma industry. Currently, China is emerging as a leader among top outsourced countries because the largest supply of skilled labor, simply because it has the largest population. Although China is not a developed country, it still has the largest number of engineers. This gives the country an enormous advantage in outsourcing. 

China continues to dominate the business forum, particularly because the Yuan is pegged to the dollar. Even if the dollar falls, outsourcing to China is still cheaper because of this currency link. China is now providing the option of developing your brand at very high quality. 

When you look at the one of the top pharmas in China, WuXi PharmaTech (NYSE:WX), it has a 100 percent retention due to its excellence in R&D. Incidentally, the MBAs and the PhD’s in the company studied and were trained in the west to close the gap between business counterparts like Pfizer, etc. As the firm adheres to exceptional employment and business practices, it also wins by gaining the best projects in the industry. 

In addition, the Chinese government continues to support outsourcing firms. This might be because the Chinese economy is largely dependant on manufacturing. Apart from education, the state government also supports infrastructure of companies that engage in outsourcing. 

Perhaps the most attractive advertisement for Chinese outsourcing is that an American firm gets a lot of value for the dollar at 6.81 Yuan per dollar. In fact, this kind of service is cheaper than you would get in any other offshore destination. Most companies would testify that they are left with a comfortable margin even after some of the extraneous costs like shipping.




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