Recently, the topic of manufacturing costs in China and the United States is very popular. In recent years, many companies have begun to invest overseas to set up factories. Some people think that the high cost of manufacturing in China has “forced†these companies. Cixi Jiangnan Chemical Fiber Co., Ltd. was an enterprise that invested and set up factories in the United States earlier. Recently, Sun Zukang, the chairman of the board of directors, gave a detailed and detailed account to the Xinhua News Agency. Click to buy cashmere sweater Talking about the original intention: Cost is not the main reason for “going away†to go to the United States to set up factories is the strategic layout needs Our company was established in 2000 to produce recycled polyester staple fibers. In September 2013, we invested 45 million U.S. dollars in the establishment of a branch in South Carolina, which is relatively early in the industry. Click to buy cashmere sweater Now that the cost of manufacturing in China and the United States is very popular, public opinion is almost lopsidedly saying that the rising cost of domestic manufacturing has forced companies to "force". Based on my actual situation, although production costs have indeed been rising during these years, we are also eager to reduce the burden, but this is not the main reason for companies to “run awayâ€. 80% of our company's business is exported and nearly 80% of our business is exported to the United States. Because domestic production capacity is limited and cannot meet customer needs, US customers have asked us to set up factories in the United States. Therefore, we go there to set up factories mainly because we do not want to lose the US market, and we can save the high transnational freight. This is a strategic layout. Most of the companies we have come into contact with do business abroad or take market factors into consideration. I started to visit the United States several times in 2011. As far as the chemical fiber industry is concerned, the labor cost required to produce 1 ton of chemical fiber in China is around RMB 200, but it is US$ 200 in the United States, which is more than RMB 1200. The total cost of producing one ton of chemical fiber in China is also 1,500 yuan. Calculating accounts: investment costs are twice as high and I have to spend 3 times more energy management Some of the articles circulating on the Internet describe the manufacturing cost gap between the two countries. From my experience, some are not real. In some respects, the United States is indeed lower than China, but some are much higher. Of course, there are differences in the industries and investment areas, and the cost difference is very large. I only talk about our situation. Click to buy cashmere sweater Land, electricity, logistics and other costs, low in the United States In terms of land costs, our domestic factories took 200,000 yuan per mu of land. At that time, the land price in South Carolina in the United States was 10,000 U.S. dollars, which was about three times higher in China. The cost of electricity is less than 0.4 yuan in the U.S. industrial electricity consumption, and the domestic industrial price in Zhejiang Province is 0.75 yuan. However, the electricity price of residents in our country is far lower than that of the United States. The high industrial electricity price is due to the cross-subsidization of electricity consumption by residents. U.S. natural gas is calculated at 1.2 yuan per cubic meter. China's natural resources are poor, import costs are high, natural gas prices are higher, direct supply is about 1.8 yuan, and conversion is about 3 yuan; US oil prices are low, and tolls are not charged. As for the bridge tolls, the domestic logistics cost is about twice as high. Accessories cost US high The cost of spare parts in the United States is about seven times that of China. Buying a motor costs thousands of dollars in the United States. In our U.S. factory, all the production lines are shipped domestically, even if the 10 yuan device is also in the past. In 2002, we began cooperation with the largest distributor of chemical fiber products in the United States. I looked dumbfounded in their factory, the equipment was backward, the management was backward, and we eliminated the technical equipment that they still use. At that time, they wanted us to help with the transformation. I said that all equipment should be scrapped. Click to buy cashmere sweater Infrastructure costs US high The cost of land in the United States is low, but it is expensive to build a factory on the land. In the United States spinning building has spent 10 million US dollars, I built the same size in China as long as 10 million yuan. After the land was taken for land formation, the U.S. charges were very high, and light land formation would require 4 million U.S. dollars. In terms of financing and taxation, the two countries are similar. U.S. small and medium-sized enterprises generally have financing problems We have learned from the customer offices in the United States that after the financial crisis, U.S. banks tightened their loans to SMEs. As newly established foreign investment companies, we have no hope of financing in the United States. In the United States, if the company is not profitable, the bank will not lend you a penny. On the taxation front, we asked the professional team to estimate that the combined tax burden of the two countries is not much different. We have completely assigned this piece of work to a local professional accounting firm and paid all kinds of taxes in full accordance with the laws of the United States. Our U.S. plant was put into production at the end of 2015. After more than a year of operation, it was estimated that it would cost twice as much to integrate and operate as a factory of the same size than in China. American employees are not willing to work overtime. Our entire Chinese team has managed the past 24 hours. Click to buy cashmere sweater It is not easy to invest in the United States and do not blindly follow suit With low energy and land prices attracting and immigration impulses, some companies are considering investing in the United States. I suggest not to blindly follow suit. In addition to costs, companies must also consider factors such as human resources, environmental protection, and laws. I personally think that China's traditional manufacturing industry chain is very complete and has great advantages in the world. The key is to work harder and more precisely to make this advantage work. Want to learn more about cashmere sweater: accessible Pay attention to WeChat public number "Cashmere sweater industry platform" to learn more about cashmere sweater information 10KV Peelable Semi-conductive Shielding Material Eva Shielding Compounds,10Kv Cable Outer Shielding Material,Pyjbj-10 Peelable Semicon Shielding Material,10Kv Peelable Semi-Conductive Shielding Material Jiangsu Super Prosperous New Material Co., Ltd , https://www.jschaowang.com
Cixi Jiangnan Chemical Fiber: Cost is not the main cause of “runawayâ€
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