Chinese and American Manufacturing - Essay Example

MANUFACTURING IN AMERICA IS COST LESS THAN IN CHINAThe conventional wisdom that “everything can be made for less money in China than in the United States” can be baseless. This is due to the fact that most of the imported products that are presumed to come from China are indeed from American companies. It therefore becomes a fact that ‘buying from china is buying from America’ since this products are made by American firms. Examples of these products include Apple iPhones, Nike shoes, Dell computers, Mattel dolls, Gap shirts and Hasbro toys.

The sentiments claimed in an advertisement posted by GarGraves that they are able to cut their prices by more than 75% despite their competitors coming from China can absolutely true. One of the factors that can concur with this statement is the fact that there energy costs are dampening manufacturing industry of China. Industrial electricity has risen by about 66%, and natural gas by about 138% in China from 2004-2014 (Boston Consulting Research, 2014). The claims made by GarGraves can also be supported by the fact that U.

S is producing shale gas, which has resulted in a substantial decline in energy prices. Energy and electricity costs are not the only factors that can make GrayGrave to make such claims. Logistic is a key factor in determination of operation costs, GrayGrave does everything locally. Since everything is done locally, aspects such as inventory management is done with ease as well as increasing flexibility. Transportation of products such as special and multi-gauge track is very minimal as compared to if GryGrave decided to manufacture and import them from china, which will increase operating costs.

ReferencesCNBC, (2014). Why the 'Made in China' model is weakening retrieved from http://www.cnbc.com/id/101920959#.