Why Are So Many Electronics Made In China?

Wherever you are in the world you won't have to look hard for somebody using an iPhone. You might think then that because the iPhone is just about everywhere Apple has facilities turning out iPhones all over the world. The truth is that most of our iPhones are assembled in just one country China and this isn't just true for Apple gadgets I can virtually guarantee that if you take a closer look at any of the mass-produced gizmos in your home you'll find at least some parts of it that were made or assembled in China.

But why is China such a powerhouse for electronics manufacturing? Many people assume that it's because China has a huge and inexpensive labor force and there's definitely some truth to this. Not only is China the world's most populated country but it has lower minimum wages than much of the Western world. In Shenzhen one of the world's largest high-tech manufacturing hubs, the minimum wage is less than three US dollars per hour but a large pool of cheap labor is far from the only reason that China is attractive to tech companies.

Back in the 1970s the Chinese government became interested in moving away from strict central planning and toward opening up its economy to outside investment. One part of this was designating the aforementioned Shenzhen as a special economic zone which encouraged foreign private businesses to set up shop in the area through tax breaks and relative freedom from Beijing's regulations. China was especially interested in having these companies manufacture exports. This strategy ended up proving very attractive for foreign firms and today Shenzhen is one of the world's busiest ports as many of the companies who put down roots there ended up building massive factories that can very quickly scale production if there's a huge contract to be fulfilled like right before a new iPhone would hit the market.
Remember that in addition to factories and laborers needed to work in the assembly line, you also need engineers to oversee them and China has a massive number of Engineers that can provide middle management way more than countries like the U.S. Furthermore because of the sheer scope of these facilities, China can offer supply chain advantages. Lots of these factories focus on custom fabrication so everything from plastic injection for keyboards to making sure that a screw is in the right shape and the right size. This means that because they don't have to wait around for a part to arrive from the other side of the world, China's manufacturers can respond quickly to customer demands or eleventh-hour design changes.

To top it all off, many Chinese manufacturers aren't focusing just on the export market anymore. Folks who live in China are spending more on consumer goods than they ever have before including electronics and with 1.4 billion potential customers right in their backyard many of these companies are trying to expand their capacity even more to tap into the wallets of Chinese citizens.

Of course this model is largely built on maximum efficiency which has led to a lot of controversy over the years about things like environmental standards and pollution, wages, company policies regarding attendance and interactions with co-workers, forced relocation to often cramped on-campus living quarters, a need to be available at a moment's notice and even accusations of forced labor and these have led many observers to call out companies who they perceive to be using something akin to sweatshop labor. However, the fact that demand is so high for electronics makes this a problem with no immediately obvious answers especially since consumers seem to be finding it very difficult to vote with their wallets so to speak.

Many things that might have been considered frivolous gadgets 10 years ago like smartphones are quickly becoming necessities of modern life and last time I checked none of those are made in the USA by middle-class workers making Union wages.