How Does China Produce Wholesale Products?

Environmental Laws are More Lax in China

Heavy industry has, in general, moved away from manufacturing products in the United States. This exodus is largely due to stringent environmental laws enacted in the last half of the 20th century. Because these laws require expensive environmental protection actions, processes and equipment, businesses can have products manufactured cheaper in countries with fewer and more lax environmental regulation---such as China.

Chinese Workers Cost Less Money

While modern American workers are subject to a minimum wage law, no such regulation exists in China. For this reason, American workers can be replaced by Chinese workers who may cost a lot less.

Cheaper Manufacturing Costs Mean More Profit

Because the less expensive environmental regulations and less expensive labor combine to result in on overall cheaper product, items manufactured in China can be obtained by a manufacturer or distributer for a much lower price than items made in the United States. If a retailer sells these products for the a price comparable to items made in America, the resulting difference becomes a higher profit margin for the manufacturer.