|
Chinese factories are already highly automated, indeed China has invested a lot into automation, much more so than the US has. The technical talent for automation lives in China, thanks to the Chinese government taking a long term view of research and development. On top of that, the infrastructure for manufacturing exists in China. To give an example: You have a factory that makes a complex device. In theory, that factory can be brought over to the US just fine, and ran with US employees at a very comparable cost. (Trained technicians in China are not as cheap as you may thing!) But, let's say you use an adhesive. Well that adhesive is sourced from China. And the glue machine used to apply the adhesive is also made in China. If you run out of glue, or a batch goes bad, or you need to reformulate it for some reason (which is going to happen a lot during pre-production in the very least!), then you have to go back and forth with the Chinese manufacturer of your adhesive, which may include flying personnel out, getting multiple batches of new adhesive formulas through customs, and so on and so forth. In comparison, if your main factory is located in China, then the adhesive factory is right down the road. The infrastructure argument is the same as for why startups happen in Silicon Valley, at first glance the location may not be optimal, but all the surrounding services smooth out all the details. |
Sources: https://fas.org/sgp/crs/misc/R42135.pdf http://www.bls.gov/fls/china.htm