10 Reasons The Price of Imported Goods from China is Cheaper than Locally Made in Indonesia

JAKARTA – Indonesian consumers can now easily find imported Chinese products on the market. Often found, the price of the original imported product China much cheaper than locally made.

Chinese products are spread across Indonesia in various ways, from electronics to clothing, toys to home furnishings and much more. Cheap imported goods that crowd market places make it difficult for MSMEs to compete in terms of price.

One of the main reasons why imported products are so rampant is because the prices are very cheap. Here are 10 reasons why imported products from China are cheaper than domestic ones reported by SINDOnews from the Customs Trade Academy, Wednesday (26/6/2024).

1. Industrial Scale Products

China, known as the world’s factory, has a huge production capacity. This large industrial scale allows for efficiency and economies of scale. In other words, the cost per unit of a product becomes cheaper when produced in large quantities.

For example, if a factory produces one million units of a product, the cost per unit will be much lower than if the factory only produces a thousand units.

2. Subsidized Costs

The Chinese government provides various forms of subsidies to manufacturers. These subsidies can take the form of financial assistance, access to resources at lower prices, or tax incentives. With the help of this, manufacturers can lower their production costs, which ultimately makes the goods they produce cheaper.

3. Infrastructure and Copyright Support

China has invested heavily in infrastructure, including transportation and logistics networks. This good infrastructure simplifies and speeds up the process of producing and distributing goods, which in the end can reduce costs.

Additionally, China’s less stringent enforcement of copyright laws allows manufacturers to copy popular products at lower costs, which can also lower product selling prices.

4. Not subject to export tax

Certain products in China are not subject to export tax. This means manufacturers can sell their goods to international markets at more competitive prices, as they do not have to add tax costs to the selling price of their products.

5. Low Worker Wages and No Insurance

Workers’ wages in China are generally lower than in Western countries. In addition, worker protection and insurance standards are often less stringent, which means cheaper labor costs. This also contributes to cheaper prices for goods.

6. Counterfeit Products