Capable toolshops can certainly be found throughout the developing world, yet they do not enjoy the supporting infrastructure which is to be found in China: namely networks of toolsteel suppliers representing both imported and local mills, the multiple sources of quality mold components, the machine tool industries and a vast plastics molding industry to provide a growing demand.
Another factor contributing to the rapid growth in capacity and sophistication of the Chinese tooling industry is China's burgeoning automotive sector, driven by an increasingly confident and prosperous middle class.
As today's tooling industry in China is still relatively young, one finds a great range in levels of equipment investment, expertise, attention to quality issues and pricing. At the more advanced end of this range, the standard of equipment, management experience and technical expertise qualify the Chinese toolshops as World Class.
Investments in high-speed milling and high precision EDM are but two examples of their determination to be at the "cutting edge" of manufacturing technology, and these also illustrate the availability of financial resources necessary to achieve this goal.
This is the golden age for purchasing from China, because the Chinese currency is grossly undervalued. According to the official exchange rate, 1 Yuan is equivalent to $0.16, but if you go where the Chinese shop, you find that 1 Yuan has the purchasing power of $0.50 to $1.00, depending on the product or service.
Weighing the pros and cons of switching tool sourcing from local US suppliers to off-shore, China offers one clear and powerful advantage: lower cost. The actual cost savings varies depending on the mold characteristics. For cases where we have been able to get reliable estimates of what the mold would have cost had the US customer ordered from his usual local toolshop, the mold buyer's saving due to purchasing a Chinese mold via AQA-Tooling usually falls in the 40% to 45% range. And this includes all importing and shipping costs.
When first considering going off-shore for a custom tool, the buyer will be pleasantly surprised to learn of numerous new component suppliers offering excellent quality and at far better value than the familiar sources he had been using previously. So while much of the savings comes from lower direct labor cost and lower labor cost contribution to the indirect burden, cost savings also result from better value of many purchased components and supplies.