The Revelation Of Making China Safer And Cheaper Abroad To Chinese Garment Enterprises

It has been reported that a Chinese mother who gave birth to a child in the United States bought a container item in the US shopping season and shipped it back to the country, especially for many items that the child was 5 years old, because these goods were much cheaper than China and were very safe.

Tourists who have been to the United States know that although American goods are mostly made in China, there are two characteristics that China can hardly match: cheap and safe.

In China, the price of international brands that are made in China may be several times higher than that of the United States. If these brands are not purchased, domestic brands will be indifferent to the sense of insecurity.

Why can't China's domestic products be cheaper and safer? Especially in the US, the case shows that improving product safety does not make the price more expensive.

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The price in the country of origin is several times the price of the overseas market, and the reasons are complex.

First of all, the scale of the purchase of American enterprises is large, the huge orders can reduce the unit price cost, and the competition in China's export processing industry also reduces the ex factory price. The reason why Chinese processing factories take large profits from American enterprises is that the order means a stable profit without risk (though there may be exchange rate fluctuation).

The Chinese government subsidized US consumers with export tax rebates, and encouraged companies to sell goods to the United States even below cost.

If the international brand produced in China is to be sold in China, it needs to export before it can be sold domestically.

And undertake the cost of China's commercial logistics.

China's large commercial establishments lack, and manufacturers do not have their own sales channels. Therefore, orders may be fragmented, size and profits are unpredictable, which raises manufacturing costs and factory prices.

Secondly, China's tax and logistics costs are too high. According to IMF's calculation, the tax cost of Chinese commodity prices is 4.17 times that of the United States and 3.76 times that of Japan.

Logistics costs are mainly composed of high oil prices monopolized by state owned enterprises (tax accounts for about half) and tolls, which means that the State takes too much of the price.

In addition, housing rents rose sharply in recent years due to the rise in property prices (mainly driven by government controlled land prices). Commercial enterprises have to share part of the cost into commodity prices. International brands also have special brand premium (including scarcity and identification) of developing countries, so even the mass brands in the United States have become expensive and expensive.

And the safety of goods is made in China and other developed countries.

A threshold must be passed, otherwise it will not be able to get the order.

But in China, security is not an inevitable threshold, even if food is unable to ensure safety, let alone manufacturing.

Moreover, because the non production cost in China's sales price is too high and rigid, if we want to ensure that both production and sales are profitable, we must substantially reduce production costs or expand output through illegal means.

It can be seen that the tax burden and unreasonable cost in Chinese commodity prices are too high, resulting in a high price and low quality or safety.

The main difference between China and the United States lies not in commodity prices and security, but in the fact that the United States has high wages and low prices, and China's low wages and high prices are such a cruel fact.

The Chinese government has always wanted to boost consumption, but the income of Chinese workers is too low and the tax burden is too high. Social wealth mainly flows to finance and enterprises, and has no ability to expand consumption at all.

The Chinese government should not only lower the tax burden, but also stop the massive inefficient investment, because the latter, like a bottomless pit, puts China in a persistent inflation and asset price rise, and even weakens the ability of the ordinary people to consume.