As a buyer, it is important to know the industry cluster zones in the countries where your suppliers are located. This is because the ability to form an industry cluster means that the industry has an advantage in the region in terms of raw materials, labor, logistics and other factors. By knowing the industry clusters, you will be able to make a better judgement when assessing the price of a product. The reason for the price advantage is the reduction in material, logistics and labor costs brought about by the industry clusters, rather than poor quality materials and unprofessional quality control systems.

There are four main industrial cluster belts in China, namely the Yangtze River Delta Industrial Cluster Belt, the Pearl River Delta Industrial Cluster Belt, the Northeast Industrial Cluster Belt and the Western Industrial Cluster Belt.

Yangtze River Delta Industrial Cluster Belt.

The Yangtze River Delta industrial cluster belt is in the central-eastern part of China.

For foreign trade practitioners, the main cities in the Yangtze River Delta industrial cluster belt are Shanghai, Suzhou, Ningbo and Hangzhou.

It has good infrastructure, proximity to the sea and ports, and the advantage of a port.

In the Yangtze River Delta industrial cluster belt, the products produced include, from the vertical product chain, labor-intensive consumer goods, textiles, small household appliances, stationery products in concentration, and electronic products. And from the horizontal product chain, among the equivalent products, they are again labor-intensive products, most of which do not have a very high technological content.

Of course, in the Yangtze River Delta region, while there is a price advantage, it also has its potential drawbacks. It is the price that is the advantage of the region and at the same time has caused vicious competition caused by some factories in order to lower their prices.

The following points need to be noted as suppliers purchasing in the region:

• Pay attention to the protection of intellectual property rights.

• Pay attention to sample confirmation and compare the quality of large samples with confirmed samples during inspection.

• Communication with suppliers to keep abreast of production progress.

The Pearl River Delta industrial cluster belt.

The Pearl River Delta is located in the south of China.

For foreign trade practitioners, the industrial cluster belt in the Pearl River Delta includes Hong Kong, Guangzhou and Shenzhen.

This region has received a large number of investments from foreign companies under the influence of China's reform and opening-up policy, and has a very favorable foreign trade and taxation policy. It has an unstoppable attraction for both labor and investors.

As mentioned in the previous article, the largest foreign trade sourcing exhibition in China, the Canton Fair, is held in Guangzhou, which makes this region the first door for foreign buyers to enter China for sourcing. Some buyers will set up offices in Guangdong to facilitate technical communication and production coordination.

Therefore, compared to the Yangtze River Delta, the products of the Pearl River Delta are at a stage of transition from labor-intensive to high-tech products, such as some high-tech electronic equipment, machinery, and automotive parts. In addition, lamps, toys, household and porcelain are still in the lead due to the continuity of traditional industries.

Although the product cluster belt in the Pearl River Delta has a high technological content of products, it also brings an increase in prices. Because of the presence of many foreign companies, suppliers are well aware of how their prices reach a threshold that allows both parties to make sufficient profit. For suppliers seeking price, the products in the Pearl River Delta, are not ideal. Some basic models are more advantageous in the Yangtze River Delta.

Both the Yangtze and Pearl River Deltas are coastal regions with the unique advantage of ports, which reduces the cost of transport, and this has led to the movement of much of the labor force from the interior of China to the east and south.

The Northeast Industrial Cluster Belt.

The Northeast Industrial Cluster Belt is located in the northeast of China. Shenyang, Dalian and Harbin, Changchun and Anshan are the main cities.

In contrast to the light industrial clusters in the Yangtze and Pearl River Deltas, the industrial clusters in the Northeast are dominated by heavy industries, such as steel, oil, aviation and automobile manufacturing.

From the point of view of foreign trade exports, not many are purchased from the northeast, and some foreign trade enterprises in the Yangtze River Delta and Pearl River Delta may purchase some product parts and eventually ship the finished products after assembling them in the coastal areas. Because for foreign trade factories, the transportation cost from the northeast to the coast occupies a large part of the product cost, thus it is difficult to have a competitive advantage in price with the coastal areas. In addition, the light industry in the northeast is not a perfect foreign trade chain, and the additional cost to suppliers in terms of management and quality control is relatively high.

Western Industrial Belt.

The Western Industrial Belt is located in western China, with Chongqing and Chengdu as the main cities.

In terms of foreign trade sourcing, the situation in the western industrial belt is very similar to that in the northeastern industrial belt. Land and labor costs are low. And in the past 20 years, because of the rapid economic development of coastal areas, many young laborers have moved to the coast, which has led to higher land, housing and labor costs in the east. This year, under the guidance of the government's "western development" policy, some coastal enterprises have gone to the west to build factories, thus driving some of the labor force from the west to the east coast to return to the west. Even in this environment, the logistics cost in the west is still a pain point for foreign trade exports, whether the high logistics cost can be offset with labor and land cost. The management of foreign trade factories, the interpretation of international trade policies and the knowledge of intellectual property protection, systems that have been relatively well developed in the Yangtze and Pearl River Delta industrial zones, are difficult to form in the short term.

This is a basic introduction to the strengths and weaknesses of the four major industry belts for sourcing in China. By understanding the industry belts, buyers can get a better picture of their suppliers. For example, in the case of wall switches, what region the supplier's factory is located in. From the previous introduction, it can be judged that the mainstream factories will be in the Yangtze River Delta week and the Pearl River Delta industry cluster belt. The next step is to see which level of the product chain we need the wall switch to be in. For primary basic products and high price control, consider the Yangtze River Delta industrial belt; for high-end intelligent wall switches with low price sensitivity, consider the Pearl River Delta industrial belt. Of course, it is not necessary to choose a supplier within the industrial belt, but the very high price of the industrial belt has a reference value and can be used as a reference standard so that we have a standard to measure when choosing a supplier and negotiating prices. For more information about the distribution of China's industrial chain, please feel free to communicate with us privately or follow our official website https://www.hbsocket.com/ for more information.