Blautopf t1_j95jwzq wrote on February 19, 2023 at 12:15 PM

China has a largely free market with strategic state intervention as well as many state owned companies competing in this market. They have a massive supply of cheap but often well-educated labour, low regulatory costs including environmental costs as well as labour costs.

The state subsidises many industries, especially those producing raw materials such as steel and many others. Cheap state backed loans as well as land to build production on are often available.

So cheap labour, low environmental costs, and cheap raw materials added to economies of scale have allowed low-cost mass production to flourish.

FeistyCanuck t1_j96ot58 wrote on February 19, 2023 at 5:49 PM

Economy of scale is a huge factor. It is a lot cheaper per unit to make 1 million refrigerators than it is to make 100.

ostentatioushuman t1_j95zdex wrote on February 19, 2023 at 2:47 PM

Labour is not that cheap anymore. Environmental regulations have also been increasing in the last few decades. That's why a lot of industries have shifted to Vietnam and other south east Asian countries, and China is doing a lot more technology based manufacturing.

Blautopf t1_j96itsp wrote on February 19, 2023 at 5:08 PM

Yes, all true and good points. I was explaining how they did it though.

Icycube99 t1_j993rxe wrote on February 20, 2023 at 4:48 AM

Education and traditional family values is a huge factor to china's success. Having "good enough" is not enough and they make great strides towards improving how efficient their production is. Combine that with a strong sense of family ownership and you get powerful generational wealth.