In terms of cost competitiveness, the wage cost of China’s manufacturing industry in 2025 has exceeded that of Southeast Asian countries by 210% (Vietnam’s average monthly wage is 380 vs. China’s is 800), but the density of industrial robots has reached 340 units per 10,000 people (Vietnam’s is 38 units), and the automation rate has reduced the reliance on human labor. An American furniture manufacturer’s calculation shows that the Foshan smart factory has reduced the proportion of labor to 15% through modular production, and the total cost is still 12% lower than that of Mexico. It saves $480,000 for 150,000 sets of orders. The photovoltaic bracket industrial cluster in the Yangtze River Delta has achieved a raw material procurement radius of no more than 50 kilometers, and the proportion of logistics costs has been compressed to 3.2% (8.7% for factories in the Midwestern United States).
The resilience of the supply chain has been tested by extreme events. During the 2024 Typhoon “Capricorn” that hit South China, Chinese ports activated intelligent dispatching systems and restored 90% of their throughput within 72 hours (67% faster than the recovery speed of typhoons of the same level in 2019). Compared with the 37-day global supply chain delay caused by the Suez Canal blockage in 2023, sourcing from china enterprises ensured the on-time delivery of 85% of orders through the China-Europe Railway Express (18-day delivery time) and collaboration within the RCEP region (components in Thailand + assembly in China). In the automotive electronics case, Ningbo Joyson Electronics managed to keep the delivery time fluctuation within ±5 days during the chip shortage period through localized alternative solutions (the fluctuation for European suppliers was ±28 days).
The speed of technological iteration constitutes a core barrier. The R&D cycle of Shenzhen’s consumer electronics industry has been compressed to 23 days (the average in Silicon Valley is 98 days), and by 2025, 65% of global AR/VR patents will originate from the Greater Bay Area. Dji’s factory has achieved the production of one educational robot every 2.4 hours, and the weekly update frequency of software and firmware supports the response to customized demands. German industrial sensor company Bosch was forced to move 40% of its low-voltage product line to Suzhou, as local supplier GigaDevice provided 32-bit MCUS with ±0.05% accuracy, which were 29% cheaper and supported sample delivery within 48 hours.
Compliance costs have sharply increased due to policy upgrades. The EU’s CBAM carbon tax mechanism has raised the export costs of Chinese steel by 19%, but leading enterprises have already made plans for green power. The carbon footprint of photovoltaic modules at Longi Green Energy’s Shaanxi factory has been reduced to 380kg CO₂/kW (the industry average is 620kg), with an export premium of 8% to Europe. The textile industry is facing challenges from the DMA regulations. Changzhou Xurong Group has invested 2.3 million yuan in digital printing equipment, reducing the use of chemical dyes by 83.12 billion yuan in orders.
Geopolitical risks require smart response strategies. The US Section 301 tariff list covers $37 billion worth of Chinese goods, but enterprises avoid the impact by processing in Mexico (under the 35% value-added rule). Dongguan audio equipment manufacturers set up assembly and wiring in Monterrey, extending the logistics delivery time by 7 days but reducing the total tariff cost from 25% to 4.5%. Meanwhile, the utilization rate of the China-Asean Free Trade Area’s rules of origin has reached 78%. The combination of Malaysia’s semiconductor packaging (with a 15% tariff preference) and Shenzhen’s IC design has formed a new industrial chain model, making the overall cost of TWS headphones still 21% lower than that of the US-funded supply chain.
According to the Boston Consulting Group’s matrix assessment, the cost advantage of medium and low-tech products (such as ordinary furniture) has narrowed from 35% in 2015 to 12% in 2025, but high-tech products (new energy equipment, IoT devices) still have a premium space of 18-25% due to the industrial agglomeration effect. The core value of sourcing from china is shifting from “cost depression” to “agile innovation ecosystem”. Leading enterprises have reduced the development error rate by 42% through digital procurement (such as the RFQ response of Alibaba International Station being less than 3 hours). This is a system advantage that is difficult to replicate in Vietnam (with an average feedback of 7 days) or India (with a sample error rate of ±8%). The decision-making formula should be updated to: [(Direct cost ×1.2) + (innovation benefit ×0.8) – (risk cost ×1.5)], and it still holds strategic value when the outcome is greater than 15% of local procurement.