7 Reasons Why China Became the Biggest Exporter in the World
May 23, 2023
There is no doubt that in regards to economic growth and development China is one of the most renowned with its fierce competition with the United States. This is especially apparent in terms of exported goods tagged as “Made in China” all around the globe as China keeps expanding their horizons towards new trade partnerships with many other countries. This seemingly ever-growing economy has led to China being named as "the world's factory".
Data has shown that China’s exports to the United States was around $582.76 billion US dollars in 2022. But that’s not all, China has also exported more than $3.593 trillion to all parts of the world. China produces everything from dairy products to every household appliances product and many more.
China is the global powerhouse and a prominent force in the international trade arena, known for its massive export volumes across various industries. The question arises: Why and how is China able to export so much? In this article, Uniair Cargo will delve deeper into the factors that contribute to China’s extraordinary export power.
Many have speculated on what makes Chinese products able to thrive in the international markets with common assumptions being the cuts towards their production costs but is that really all to it? Turns out there are many other factors at play in China’s development in creating and maintaining such a strong business ecosystem on an international scale.
For a related article, read 5 Most Exported Commodities of Indonesia to China to learn more
China’s emergence as the world’s manufacturing powerhouse is a key driver of its export success. The country has established an extensive manufacturing infrastructure, supported by a vast labor force and a robust industrial ecosystem. China’s ability to produce goods at competitive prices, coupled with its economies of scale, has made it a preferred choice for outsourcing manufacturing operations.
One of the primary reasons behind China’s exceptional export performance is its cost advantage. The country offers relatively low labor costs compared to many existing developed countries and towards emerging or developing nations. This advantage enables Chinese manufacturers to produce goods at lower prices, attracting international buyers seeking affordable products. China is currently undergoing a massive development due to its huge population, over one billion people, and 820 million of them are ready to serve as a labor workforce.
The unparalleled success of China’s international trade arena can be attributed to the robust market access strategies that they use, including the development of their digital infrastructure, the eagerness for new trade opportunities/partnerships and networking which helps to gain easy access and more broader reach towards international audiences.
China’s booming eCommerce sector has revolutionized market access for exporters. With platforms like Alibaba, Taobao, AliExpress, Pinduoduo, JD Worldwide, 1688, Suning, and many more. These platforms can help to bypass traditional distribution channels by using advanced technology such as payment gateway that can help manage the payment from one country to another. Thus, making it easier for consumers to buy directly cheap products from China’s eCommerce platforms.
China as opposed to the US or other Western countries are not exactly complying with common guidelines or regulations regarding things such as child labor, involuntary labor, safety and health guidelines, minimum wage laws, and environmental waste management. This has then caused many companies to have unfair and undesirable policies even though many criticisms have been made in defending worker’s rights and problems regarding environmental issues due to industrial waste.
In increasing China’s competitive advantage towards their exports, certain rebate and tax & duty policies were made to eliminate double taxation for exports, creating immunity from zero percent value-added tax (VAT) and any import taxes in efforts to keep production low which not only creates an advantage from other exported goods but also to attracts investors that are looking for ways to produce low-cost goods.
There have been accusations on whether China has been intentionally depressing or undervaluing their currency as a form of competitive edge with U.S produced goods. With the yuan appreciating 8% against the dollar in 2018 and in 2019 China's central bank lowered the value of yuan to 7.0205 per dollar. This led to the price of exported goods from China to be cheaper than similar exported products from their competitors.
China’s well-developed and efficient supply chain networks contribute significantly to its export dominance. The country has invested heavily in infrastructure, including ports, roads, and logistics facilities. This infrastructure enables smooth transportation and distribution of goods, facilitating timely and cost-effective export operations.
Its seaports are one of the busiest globally, handling large volumes of containers efficiently, and making sure seamless operations to maximize supply chain efficiency.
Uniair Cargo, a trusted freight forwarder company established in 1989 in Indonesia, is your reliable partner for all your import and export needs. With ISO, AEO, and IATA certifications, we uphold the highest standards of quality and professionalism in our services.
By choosing us, you gain access to our extensive knowledge and experience in navigating the intricacies of Chinese customs regulations, ensuring compliance and minimizing any potential delays or complications. We leverage our strong network and industry relationships to secure competitive rates, saving you both time and money.
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