How U.S. Companies Decide Where To Locate Their Chinese Factories

Wages and working conditions in Chinese factories have made headlines lately, following the big New York Times expose of the Apple supplier Foxconn. But according to surveys of almost 1,800 U.S. firms working in China, urban infrastructure such as internet access and spending on things like roads and police protection are more important than wages in choosing where to locate factories within China.

The research, conducted by three University of Cincinnati geography professors and based on surveys from the Chinese business association SinoTrust and Chinese census data, looked at 143 Chinese cities selected by American companies between 1982 and 2008. Although the research is preliminary and the scholars hope to travel to China to confirm the findings and investigate further, it helps explain the business decisions behind the huge growth in Chinese manufacturing.