China World’s Production Hub: Even today, China remains the undisputed leader of the world in terms of manufacturing. According to Safeguard Global’s 2024 Manufacturing Report, goods worth $4.66 trillion were produced in China in the year 2024, which is about 28 percent of global manufacturing. In comparison, America stood second with a production of $2.91 trillion, while Japan ($867 billion) and Germany ($830 billion) came after it. Despite cheap labor costs, India will produce only $490 billion in 2024, which is about three percent of the global share. The share of countries like South Korea, Mexico, Italy and Britain also remained between 1.7 to 2.5 percent.

How is China still a production hub?

It has often been believed that China’s manufacturing power is due to cheap labour, but now this belief is not entirely correct. Wages in China have increased rapidly over the past three decades and by 2022 the average wage for factory workers could reach about $8 an hour.

In comparison, labor costs are much lower in countries like Vietnam, Malaysia, Thailand and India. Despite this, China’s production remains high, which clearly shows that cheap labor alone is not the decisive factor.

where how much labor cost [सेफगार्ड ग्लोबल की 2024 मैन्युफैक्चरिंग रिपोर्ट]

Country	Labor cost per hour (in dollars)	global share
China	4.66 trillion dollars	28.9%
America	2.91 trillion dollars	17.2%
Japan	867 billion dollars	5.1%
Germany	830 billion dollars	5.1%
India	490 billion dollars	3%

According to the World Economic Forum’s analysis, China’s real strength is its high productivity and strong industrial ecosystem. Labor costs may be high in China, but the productivity, speed and quality of workers there are far better than those in low-cost countries. For global companies, total production costs matter more than just wages. In many cases, despite cheap labour, overall costs increase due to low productivity.

How does China dominate the market?

In addition, China has developed a comprehensive industrial ecosystem over the past several decades, where raw materials, components, assembly plants and supply chains are located in close proximity to each other. This makes production, logistics and coordination easier and faster. This is why the World Economic Forum believes that for any company, leaving China and going to another country can prove to be more expensive and complicated than staying there.

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