International production

Why are the Chinese companies moving their production to Germany? It seems strange that the Chinese would do this because of their strong reputation of being a super low cost producer. It comes to the point that the Chinese want to speed up the delivery time for their higher end products shipped to Europe. It takes about four weeks to ship product from China to Europe. This time lag is perfectly fine for low quality products, but when customers want quick service for the high quality product then needs have to be met.

China focused in on Germany for manufacturing high quality in order to acquiring German patents and engineering experience. It takes many years to know how to produce large equipment like the Germans do. China considers the higher worker wages of $2000 to $26000 per month, versus $400 to $500 well worth the money.

The production contract between China and Germany is a win, win situation. Not only will the German infrastructure and quality of life be improved, but as will China by increasing exports by 34 %. The past two years has been strengthening the relationship between the two countries when China moved to be the number 2 buyer of German machinery. That has been a big impact on the German economy.

This article is found at The Chinese are coming....To Germany

1 comment:

Dr. Tufte said...

-1 for a poorly formatted link in Dale's post.

Isn't this juicy - an example of China outsourcing to Germany. And the Chinese are happy to pay the higher wage get better production and access. This is how the world works (commonly), but the legacy media are not always very good about reporting this sort of thing.