Moving production is a reasonable thing to consider and a bad thing to do for the wrong reason. The honest comparison asks what the factory cannot make itself, and where those parts come from.
What actually differs
- Component availability. For many categories the sub-suppliers are still in China, so producing elsewhere means importing components — with the delay and cost that implies.
- Depth of specialisation. China's advantage is less cost than the density of firms that do one narrow thing extremely well.
- Tooling and engineering support. Often faster and more experienced in the Pearl River Delta than in newer manufacturing regions.
- Duty treatment into your market. This can move the total more than the factory price does, and it is category-specific.
| What you are comparing | Why it decides the outcome |
|---|---|
| Component availability | For many categories the sub-suppliers are still in China, so producing elsewhere means importing components. |
| Depth of specialisation | China's advantage is less cost than the density of firms that do one narrow thing extremely well. |
| Tooling and engineering | Often faster and more experienced in the Pearl River Delta than in newer manufacturing regions. |
| Duty treatment | Can move the total more than the factory price does, and it is category-specific. |
| Unit labour cost | The least decisive variable — labour is a smaller share of the total than it feels. |
When moving genuinely makes sense
When the product is labour-intensive and simple in its supply chain; when duty treatment favours the alternative origin meaningfully; or when concentration risk itself is the problem you are solving. Those are real reasons. « Cheaper labour » on its own usually is not, because labour is a smaller share of the total than it feels.
Compare landed cost with a working sample in hand from each origin, not quotations. The gap between a quotation and a first acceptable sample is where the real difference shows up.