The Real Reason Your Gadgets are Made in China

My biggest grouse about shopping in the USA is this: nothing is made in the USA. Shirts come from Sri Lanka, Bangladesh or the Philippines. Shoes, soaps, gadgets and everything else comes from China. The only exception is the New Balance shoes. I heard these are still made in the USA. Now we stand at a point where almost every gadget anywhere in the world is actually Made in China. No matter where you buy you are bound to find a Made in China sticker on it.

Foxconn's manufacturing facilities in China have been marred with suicides and explosions the past couple of years, although Apple and other firms swear by their Chinese plants' efficiency. (AP)

Everything, from the highly expensive iPhones to the ultra-cheap ZTE phones, and anything in between, is made in China. So what’s the real reason for China being the biggest supplier of our beloved gadgets? Cheap labor? Sure. Favorable laws? Sure. But it’s much beyond cheap labor and favorable laws. For gadget makers, cost of labor is zilch compared with the technology, parts and the research costs.

If it’s just cheap labor then Apple couldn’t have offered us all such a high quality products in iPhones and iPads. Apple’s perseverance with Chinese suppliers and manufacturers is a signal enough that China is much more than pure numbers. So what’s favoring China?

Speed and flexibility. These two are a deadly combination hard to beat and imitate. This can be probably be explained by an example quoted by a recent New York Times article (A must-read). The original iPhone’s initial design had a plastic screen and not glass, but Steve Jobs wanted to change the design at the last minute just before the iPhone was about to hit the US shelves. The design change was done in a matter of hours at the company’s Chinese contractors, like it’s no big deal.

8,000 workers were woken up, given a biscuit and tea and were assigned 12 hours shifts. In 96 hours, a capacity to produce 10,000 iPhones per day with the newly designed glass screens was established. Now what other country or industry can match that?

Add one more quality to the mix and you have a perfect troika: perfection. Steve Jobs’ obsession with round-edged rectangles and perfection is well documented. China fits Apple’s and Steve Jobs’ perfection mantra perfectly.

In 2007, a little over a month before the iPhone was scheduled to appear in stores, Mr. Jobs beckoned a handful of lieutenants into an office. For weeks, he had been carrying a prototype of the device in his pocket.

Mr. Jobs angrily held up his iPhone, angling it so everyone could see the dozens of tiny scratches marring its plastic screen, according to someone who attended the meeting. He then pulled his keys from his jeans.

People will carry this phone in their pocket, he said. People also carry their keys in their pocket. “I won’t sell a product that gets scratched,” he said tensely. The only solution was using unscratchable glass instead. “I want a glass screen, and I want it perfect in six weeks.”

After one executive left that meeting, he booked a flight to Shenzhen, China. If Mr. Jobs wanted perfect, there was nowhere else to go.

China is doing to gadgets what Japan did to automobiles in three decades ago. When someone refers to the gadgets being cheaply made in China, we all now know that it’s only half the truth. Yes, labor is cheap. But that’s only one side of the coin. In China, what’s impossible elsewhere can easily be done if the price is right.