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Published: March 26th 2014
Last 6AM of this week as the class drove towards Shenzhen, immigration stop, blah blah blah.
Today was different though. We went further into mainland China and there definitely is a different vibe. (see pictures) The places seemed a few years behind from Hong Kong and the immediate city of Shenzhen. Buildings just seemed a bit off and the infrastructure just was not all there. (see pictures)
Our first company was Payton Technology and their parent company is Kingston. If that name sounds familiar, the company multinational computer technology corporation that develops, manufactures, sells and supports flash memory products and other related memory products. They gave us a tour of the facility of how to make memory and circuit boards. But it wasn't the biggest surprise...
Our second company was TCL Multimedia and the company designs, develops, manufactures and sells products including televisions, mobile phones, air conditioners, washing machines, refrigerators and small electrical appliances. The company also has made the LARGEST LCD TV on the planet at 110-inches. The total sticker price is about 151,000 USD. For all of those reading this, I posted a picture of what I wanted for my birthday gift. (see picture) The company
brings in about 50 BN USD per a year in revenue...but that wasn't the biggest surprise...
The biggest surprise is when critics, media, and politicians argue that China is only manufacturing by labor. If you think China manufacturing plants have 1000 people working in assembly lines, standing in the same positions for hours and hours on end, you couldn't be more on the opposite spectrum. All 3 plants I have visited have been 90% automated by machines. One machine in TCL that extracts the vapors from plastic costs 30 MN USD, and the company has 14 of these machines in the plant.
30MN x 14 machines = 420,000,000$ in just 14 pieces of machinery.
My final point is that businesses don't come here for strictly cost. It just isn't true. If you look at Southeast Asia, Vietnam, Bangladesh, businesses can save on labor costs if they choose to go there. So why don't they?
Simple answer. Efficiency, productivity and infrastructure. The manufacturing plants here are calibrated at 100% capacity and from the CFO of TCL told us that the ratio of a product throughput for China is 2:1, India 1:1, and Southeast Asia .50:1.
On
a side note, I ate a burger in Hong Kong. (see picture) I am craving In N Out so bad. CURSE YOU AMERICAN FAST FOOD.
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