On China's remanufacturing efforts

In the previous post I told you about the letter of intent Chinese government and Caterpillar has just signed. First, this letter reportedly motivated by the Chinese government attempts to create an environmentally sustainable industry. It is long expected since the hazardous computer waste has been residing in rural areas, and causing, god knows, how many different diseases, dolphins got extinct because of the heavy water pollution…

However, is it really that? Pleasing environmental groups and actually attempting to “sustain” is a small part of this whole act. Now let’s speak some numbers. In a previous post, I talked about cost breakdown of remanufactured vs. new products and in addition to tha,t we know everyday raw material and oil prices climb up. A remanufactured product cost about 30% of a new one and 40% of the total cost is materials while 60% is labor. A new product 70% is material and 30% is labor. You do the math: Besides labor cost advantages of manufacturing in China add the raw material cost advantage, then add the “socially responsible” manufacturer image and positive environmental impact. We will all see in the long run what a competitive advantage remanufacturing will turn out to be for China.

If you’d like to learn more about pollution in China, please click here.