eli5: Why are Chinese products so inexpensive?
In: 5
China has a largely free market with strategic state intervention as well as many state owned companies competing in this market. They have a massive supply of cheap but often well-educated labour, low regulatory costs including environmental costs as well as labour costs.
The state subsidises many industries, especially those producing raw materials such as steel and many others. Cheap state backed loans as well as land to build production on are often available.
So cheap labour, low environmental costs, and cheap raw materials added to economies of scale have allowed low-cost mass production to flourish.
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