Advantages of Manufacturing in Mexico vs. China

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As global businesses consider where to expand their production and manufacturing operations, they must weigh several factors including cost, logistics, and quality. In this blog post, we compare the advantages of manufacturing in Mexico vs. China. Spoiler alert: Mexico comes out on top! Keep reading to learn more.

When it comes to manufacturing, many companies are choosing to do so in Mexico instead of China.

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Communication is much easier in Mexico. While doing business in China can be complicated and time-consuming, Mexico is significantly more straightforward. Also, in terms of English-speaking capabilities, Mexico has a much larger English-speaking population than China. This eliminates the language barrier that can occur when working with Chinese manufacturers and makes it easier to communicate with production teams.

Production costs: Production Costs are much lower in Mexico than they are in China. On average, labour costs in Mexico are 20% lower than in China, while factory rental fees and compliance regulations tend to be lower as well. This means that companies can produce goods at a lower cost in Mexico.

Manufacturing process: Mexican manufacturing processes tend to be faster and more efficient than those in China (for new product manufacturing, not products that are mass-produced for catalogues). Fewer bureaucratic hurdles stand in the way of production, and it generally takes less time to get approvals for different projects. This means that companies don’t have to wait as long for their products to be produced, which can save them both time and money.

Shipping: Mexico is much closer to the United States than China, which makes transportation cheaper and faster. Goods can often be shipped from Mexico to the U.S. in less than a week, whereas it may take longer from China. This is especially beneficial for companies who need their products quickly or in bulk quantities.

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Trade agreements: The United States-Mexico-Canada Agreement (USMCA) was signed in 2018 and went into effect on January 1, 2020. It is a trade agreement between the United States, Mexico, and Canada that replaces the North American Free Trade Agreement (NAFTA). One of the main goals of the USMCA is to create a more level playing field between Mexico and China when it comes to trade. The agreement stipulates that all three countries must treat one another equally when it comes to tariffs and other trade barriers. This helps to ensure that Mexico is not at a disadvantage compared to China. The USMCA also includes provisions that aim to protect intellectual property rights. This is important because it ensures that Mexican manufacturers will not be able to steal intellectual property from U.S. companies and sell it back to them at a lower price.

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This provision is especially beneficial for U.S. technology companies, which have been struggling to compete with Chinese companies in recent years. Overall, the USMCA gives Mexico a significant advantage over China in terms of trade. It ensures that Mexican manufacturers are held to the same standards as U.S. and Canadian manufacturers, and it protects the intellectual property of U.S. companies. This makes doing business in Mexico much more attractive than doing business in China for many companies.

Quality standards: tend to be higher in Mexico than they are in China. Mexican factories adhere to strict guidelines for production and safety, ensuring that products meet or exceed customer expectations.

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]For example, all food factories in Mexico that sell to the United States are FDA-approved. Other factories have different certificates that are internationally recognized.

This is not always the case with Chinese manufacturers, who may lack the infrastructure or resources needed

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If you’re considering moving your manufacturing operations to Mexico or China, it’s important to weigh the pros and cons of each location. From communication and production costs to shipping and quality standards, there are a number of factors to consider. Ultimately, it comes down to what makes the most sense for your business. If you have any questions about outsourcing your manufacturing, our team is here to help. We can assess your needs and recommend the best solution for you. Contact us today to get started.


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