Is it cheaper to order building materials from China?
It is cheaper for China to order building materials, and there are various reasons to support this claim. Here are 13 main reasons why.
1. Price:
The high demand for building materials has enabled building materials manufacturers to reduce costs. Improved manufacturing processes also allow them to deliver products at the lowest cost.
2. High savings in transportation costs
China has been listed by UPU as one of the countries in transition. UPU determines international shipping rates. For example, it is cheaper to ship from China to the United States than from one U.S. state to another. As a result, even importers have to pay freight and some import duties, and they can still save more than 50% on costs, sometimes 300%, like kitchen cabinets.
3. Trade finance practices
Local banks encourage foreign buyers to buy from Chinese manufacturers. Therefore, it is not difficult for building materials suppliers to obtain payments from other countries. Letters of credit are also commonly used in international trade.
4. Skilled labor
China has one of the lowest rates of skilled labor than many countries. As we mentioned above, Chinese people are very clever and diligent. They can work very efficiently and skillfully.
5. Low wages and labor protests
The low wages mentioned here are mainly compared with those in developed countries. All employees in China need to be members of the All-China Federation of Trade Unions (ACFTU). The All-China Federation of Trade Unions has a monopoly on the establishment of trade unions throughout the country and can control wage growth and labor protests and create a favorable industrial environment.
6. Good manufacturing ecological environment
This ecosystem encourages entrepreneurship and innovation. China has established many industrial network clusters and established major hubs based on industrial supply chains in neighboring cities.
7. Economies of scale
Chinese building materials manufacturers produce a large number of products. As a result, their fixed costs are spread across the manufacturing process that reducing the average cost of the finished product.
8. Fiscal policy
The Chinese government provides manufacturers with free land use or subsidized rent.
9 global visit
As a result, Chinese manufacturers mass-produce their products and enter the global market.
10 Increase the bargaining power of raw materials
Because Chinese manufacturers produce a lot of raw materials, they also need a lot of raw materials. This gives them more bargaining power and access to raw materials at the lowest prices
11. Infrastructure
China has developed good shipping links with other countries. This allows cargo to be flown by air or sea from China to the rest of the world.
12 Currency manipulation
China’s currency is being manipulated by the People’s Bank of China. Market supply and demand do not determine the RMB exchange rate. That makes Chinese exports cheaper.
13 Tax rebate subsidy
Compared with previous years, China’s economic growth in recent years has been driven mainly by the “troika” of investment, exports, and consumption. As a result, the Chinese government encourages manufacturers to export and provides tax rebates. Tile manufacturers like this can get a 13% subsidy when they export.
These are the main reasons why building materials ordered from China are cheaper than building materials ordered from other parts of the world.
