Germany and China are manufacturing powerhouses, each with their own specialization. For decades China contributed low wages and Germany contributed the technical know-how with decades of research and engineering experience. China was known for its mass production and Germany for advanced technology. What has been a strong partnership has now turned into a strong rivalry. The Germans received their profits and the Chinese had jobs. This worked for decades but as we all know times are changing.
Germany vs. China: Who Wins the Manufacturing War?
China has a large economy with an immense population increasing in wealth and an extremely lucrative sales market. This is why among other things China’s auto industry is surpassing Germany’s in size and also in quality. Not long ago the Chinese competitors surpassed Germany’s solar industry as China became the largest producer of solar panels. Since 1990 the production facilities of German companies in China have been rising continuously.
Germany was the world’s top exporter in machinery and equipment but has been overtaken by China. In recent weeks there has been a fall of factory orders in Germany. Germany’s manufacturing sector has been a main driver of Europe’s economy, making it a concern when a fall in factory orders happen. Blame was given to the Russia-Ukraine conflict, international supply chain issues, high cost of energy and the lockdowns in China.
“Made in Germany” or “Made in China”
Manufacturing is the priority sector of the German economy with the automotive industry still at the top of the list. Germany has top-notch technologies and the many brands produced in Germany are known for their quality. There are benefits to manufacturing in Germany and there are benefits to manufacturing in China. Remember that “Made in Germany” does not mean that the product was made within the borders of Germany. It may mean that a part of the production happened in Germany. It may also mean that a clothing factory in Moldavia has a German come to do a quality check on the finished products. Once this happens a “Made in Germany” label may be attached and the 4000 shirts and dresses are then sent to Germany. It may also mean that many of the parts of the product were manufactured in Poland, Hungary, Turkey or China.
Manufacturing in Germany or China
With its highly skilled workforce Germany has had the reputation for quality, productivity and innovation. It is also known for its high cost of labor. Some of the top exports are in the machinery, chemical, metals, electronic, food, rubber, plastic and pharmaceutical industry. For specialized low amounts of manufacturing products Germany may be the right place for you. Production time may be longer than China but if you are in Europe the shipping time will be much faster.
With its low-cost labor force, manufacturing large quantities of a product or parts will be better for many in China. China produces the quality needed if desired by the customer. A professional sourcing agent will know the best factory for your quality products to be manufactured. Production is fast, the workforce is in place and the speed and infrastructure is there for completing large and complex orders.
Success in Production
At Global Trade Specialists, we help you get your product produced with the correct tooling. When you order with us, you retain ownership of all molds. We have decades of experience helping our customers get their parts made successfully.