According to a 2014 study by the Boston Consulting Group, the average cost of manufacturing goods in the United States at that time was only 5% higher than in China. 2016, production in low-cost areas of the United States has become as economically cost-effective as production in China. Even more alarmingly, by 2018, the cost of manufacturing in the U.S. will be 2-3 percent cheaper than in China.
Why has manufacturing in China become so expensive? Here's a comparative cost analysis given by a Zhejiang boss familiar with manufacturing in China and the US.
Jiangnan Chemical Fiber Co., Ltd. in Cixi City, Zhejiang Province, was founded in 2000 and is the earliest among its peers to develop overseas markets, and has always ranked among the top two domestic peers in exports. At present, the company covers an area of 79,000 square meters, with 500 employees, five automated production lines and an annual output of 100,000 tons.
Last year, "Jiangnan Chemical Fiber" invested in the United States in the state of South Carolina to set up factories, become the first Chinese enterprise in the United States to establish a renewable polyester staple fiber manufacturing plant, the first phase of the plan to invest 25 million U.S. dollars, the second phase of the plan to invest 20 million U.S. dollars. "Jiangnan Chemical Fiber" reflects, to the United States to invest in factories, the main reason is that the domestic comprehensive costs have risen year after year, quite a struggle. "Jiangnan Chemical Fiber" calculated the cost of starting the same size enterprise in the United States and China, and provides a part of the cost of the composition of the comparison table.
1, the cost of land: China is nine times the United States
Domestic land prices are nine times the price of land in the United States, and the United States is a permanent property rights, we are 50 years of property rights. For example, in 2000, Cixi City, Zhejiang Province, the price of industrial land is 180,000 yuan / mu, the current price of land in the United States is only 20,000 U.S. dollars / acre, the equivalent of 20,000 yuan / acre, if you calculate in accordance with the current industrial land of many counties 1 million yuan / acre, it is the United States of America's 50 times.
2, logistics costs: China is two times the United States
Domestic logistics costs are two times the cost of logistics in the United States. Take the price of oil as an example, China's oil prices are 2 times that of the U.S., high oil prices, logistics costs are also high. What's more, China also has the world's rare road tolls, bridge tolls, logistics costs can not be high?
And the U.S. logistics costs are mainly composed of three parts, one is the inventory costs, the second is the cost of transportation, the third is the management costs. Comparison of the changes in the last 20 years can be seen, transportation costs in the GDP proportion remains largely unchanged, and lead to a decline in the proportion of the total cost of logistics in the United States is the most important reason for the reduction of inventory costs.
3, bank borrowing costs: China is the United States 2.4 times
The cheapest domestic borrowing costs at 6% per annum, is the United States cost 2.5% per annum 2.4 times. At 7,000 yuan per ton or U.S. $ 1,100 funds, 4 months a turnover, the domestic cost of borrowing at 6% per annum and the U.S. cost of 2.5% per annum, respectively, to calculate the company's working capital financial costs: domestic is 7,000 yuan * 4 * 0.06 / 12 = 140 yuan, equivalent to $ 22.58. The United States is $ 1,100 * 4 * 0.025/12 = $ 9, domestic than the United States 1.5 times higher.
Or normal bank borrowing, if the funds from the annual interest rate of more than 10% of the bank financial products, annual interest rate of 15% of the private equity funds, or even 20% of the annual interest rate of the private loan sharks, the enterprise is unbearable.
4, electricity / natural gas costs: China is more than two times the United States
Domestic energy costs are more than two times the cost of energy in the United States. The United States in addition to Hawaii's electricity prices are particularly expensive (island areas can not be helped), other states of electricity prices are not expensive, in Texas, for example, its electricity prices equivalent to RMB only 2 cents.
Because of China's direct pricing of electricity and natural gas, the price of electricity, gas and oil for businesses remains high. According to the domestic power consumption of 450 degrees per ton, the price of electricity 0.76 yuan / degree calculation, the unit cost of production 342 yuan, equivalent to 55.16 U.S. dollars. Higher degree of automation of U.S. equipment, the unit of electricity consumption increased by 10% accordingly, per ton to 500 degrees, according to the electricity price of $ 0.05 / degree calculation, the unit cost of production of $ 25, the domestic than the United States is higher than the United States 1.2 times.
5, steam costs: China is 1.1 times the United States
And the steam part, the domestic use of steam from cogeneration plants, according to the consumption of steam per ton of 1.6 tons, the unit price of 190 yuan / ton calculation, the unit cost of production of 304 yuan, equivalent to 49.0. U.S. dollars, the United States with a natural gas boiler ** Steam, according to the price of natural gas is 0.48 U.S. dollars / therm, the unit price of 14.52 U.S. dollars / ton calculation, the unit production cost of 23.23 U.S. dollars, domestic than the United States 1.1 times higher.
6, accessory costs: China is 3.2 times the United States
Domestic accessory costs are 3.2 times the cost of U.S. accessories. Domestic equipment performance is slightly worse, workers operating habits are bad, per ton unit cost of accessories about 100 yuan, equivalent to $ 16.13, while the United States production line equipment performance is better, workers operating habits, per ton unit cost of accessories 5 U.S. dollars, the domestic than the U.S. is higher than the U.S. 3.2 times.
7, tax costs: U.S. tax incentives
In China, a variety of taxes constantly, the business pressured. Guangzhou, a logistics company, delivery of a batch of goods to Hainan, the total income of 19,000 yuan, but the profit is only 216 yuan, of which the tax needs 1260 yuan.
And the U.S. state government is the most important thing is employment, often give companies preferential tax policies, such as property tax concessions are valid for 30 years, if the company reaches production, 30 years will be given 30 million U.S. dollars in tax breaks.
8, customs clearance costs: the United States does not need to pay import and export customs clearance costs
In the United States to invest in factories do not need to pay import and export customs clearance costs. Domestic enterprises are imported raw materials, assuming that the cost of goods into the link does not include inland freight, tariffs, value-added tax, only the cost of various types of procedures for about 3500 yuan / cabinet, each cabinet according to the 20-ton loaded, it is 175 yuan / ton, equivalent to 22.58 U.S. dollars / ton.
Domestic enterprises export finished products, assuming that the cost of export link does not include land transport costs, only all kinds of formalities cost about 1,600 yuan/cabinet, per cabinet according to the 20-ton loaded, it is 80 yuan/tonne, equivalent to $12.9/tonne. If you add the freight and so on, the cost is going to increase significantly.
9, labor costs: China's cost advantage tends to weaken
Despite the U.S. labor costs is 2.57 times the cost of domestic labor, but the United States has a high degree of automation, less labor. Two domestic production lines with a total monthly output of 4,500 tons of 250 workers, the United States equipment improvements, the same capacity of two production lines only 180 workers.
According to the current trend of rising wages of domestic workers, such as the consideration of domestic wages in 5 years and then doubled, 10 years of wages quadrupled calculation, then China's labor costs can not account for any advantage.
10, depreciation costs: the United States is China's 1.7 times
The United States depreciation costs are 1.7 times the domestic depreciation costs. The same capacity equipment and land plant, the domestic production line investment of 90 million yuan, the U.S. production line investment of 25 million U.S. dollars, according to the 15-year depreciation of annual output of 50,000 tons, respectively, to calculate the cost of depreciation of tons: domestic 90 million / 15 years / 50,000 tons / year = 120 yuan / ton, equivalent to $ 19.35 / ton. The United States is 25 million dollars / 15 years / 50,000 tons / year = $ 33 / ton, 1.7 times higher than the domestic.
11, plant construction costs: the United States is China's 4 times
The United States plant construction costs are 4 times the domestic, but more than 10 years of second-hand plant prices according to the number of years is 1/8-1/2 of the new plant, and generally good performance.
Integrated to a few points, with the domestic environmental costs, labor costs continue to rise, China's manufacturing costs have been comparable to U.S. manufacturing costs, in some industries will exceed the U.S. manufacturing costs. "Jiangnan Chemical Fiber" is a case in point, but the domestic manufacturing costs have risen sharply over the years is an indisputable fact. Made in China has been "not strong first high" problem, we must cause a high degree of vigilance, find ways to reduce manufacturing costs, and strive to enhance the "Made in China" competitiveness.