One factory, the Pearl River Guitar Factory, employs 600 workers and they produce over 60,000 acoustic guitars and several thousand electric guitars each month. Aofa Factory is another of what appears to be hundreds of guitar factories located in China. Why are there so many guitar factories in China? George Gruhn of Gruhn Guitars offered this perspective:
"The really important player on the scene today in the low end and intermediate price bracket is Mainland China. Whereas Yamaha and other makers have produced guitars in Taiwan for quite some time, Mainland Chinese guitars were always noted as being of extremely low quality.
In the past few years, however, that situation has changed dramatically. In the past ten years, China has moved rapidly toward entrepreneurial private ownership of business. The new leadership has pushed this process quickly. China now permits foreign ownership of factories and businesses as well as encouraging Chinese citizens both from Mainland China and Taiwan to set up their own ventures. Just as the Koreans were able to progress from very low-end student models with crude workmanship to remarkably sophisticated guitars more quickly than the Japanese had, the Chinese now have all the advantages of the prior experience of Americans, Japanese, Korean and Indonesian ventures.
In addition it should be noted that while Chinese labor is remarkably inexpensive, with an average annual income in China today of under $1,000, Chinese labor is by no means unskilled. China has a very high literacy rate and its workers are skilled and motivated."
In the past the world has had areas with cheap labor and other areas with skilled labor. China is a major force to reckon with because it offers cheap skilled labor. The Chinese today are producing instruments in many different settings, ranging from small workshops specializing in handcrafted instruments on up to huge industrial complexes with the latest automated technology. China held it's First Chinese Guitar Festival and the First Chinese Guitar Masters Competition in Hainan Island Monday Aug. 22. Imported instruments still remain a potent force in the marketplace especially in the low- and mid-priced market segments. However, the emphasis has shifted to a large extent away from Japan toward Korea, Indonesia, and more recently to China. During the 1970s Japanese-made instruments dominated the imported guitar market in the USA. Japanese labor was very cheap at that time compared to American. As time went on, however, the Japanese lost this competitive advantage. Virtually everything about guitar production in Japan is now more expensive than in the USA. In Japan the cost of real estate, raw materials, fuel, transportation to get product to the market, and taxes are more than in the USA, while Japanese labor now costs fully as much as in the USA. As prices for Japanese products rose, production of student grade and mid-priced instruments shifted from Japan to Korea and Taiwan and later to Indonesia. While mainland China had cheap labor, the political and economic climate there was not conducive to setting up guitar factories, and the few Chinese instruments that were in production were of extremely poor quality. In the past few years that situation has changed dramatically. The Chinese continue to have cheap labor by world standards, but the quality of instruments now being produced in China has advanced at an absolutely astonishing pace.
The Chinese have been producing violins in Beijing, Shanghai, and Hong Kong for some time. They have a strong domestic interest in classical music and violins such that much of this production is designed for their own domestic consumption, but the Chinese are exporting an increasing number of remarkably fine violins. China has good sources of spruce and maple domestically. It is possible today to purchase great sounding Chinese violins with beautiful wood and fine craftsmanship for prices far lower than anything available to us of similar quality ten years ago. The better grade Chinese violins are produced in relatively small factories with a very low tech approach. While they have assembly lines, production is primarily centered on hand work utilizing technology not especially unlike German manufacturing facilities of one hundred years ago or production techniques similar to that used by American guitar manufacturers such as Martin at that same time. By contrast Chinese guitar factories today are utilizing numerically controlled routing systems and other high tech approaches similar to those used in factories elsewhere around the world. The advent of CNC routing equipment has not only permitted instruments to be produced in quantity with precision engineering, but it has made it possible to do this work virtually anywhere in the world. Once a CNC program is written, the actual execution of the work can be done on a machine located anywhere. If one has such a machine properly programmed, it does not matter if the wood is fed into it in the USA, Japan, Germany, Korea, Taiwan, Indonesia or mainland China. It is just as easy for a CNC machine to spit out necks with superb dimensions as it is to make absolute clunkers. In the past inexpensive student models typically were physically far less comfortable to play than higher grade instruments due in large part to poor dimensions and poorly fitted component parts. Today with CNC equipment even low priced student grade guitars offer well proportioned comfortable necks which fit precisely ensuring playability nearly equal to that of much more expensive instruments. Not only are student grade instruments being made with far greater precision and better dimensions than in the past, but the material selection has improved as well, whereas even five years ago most Oriental import acoustic guitars features only laminated wood, today far more have solid spruce tops. The vast majority of Korean and Indonesian guitars today still feature laminated backs and sides, but some Korean instruments now offer solid back and sides, and the Chinese are starting to manufacture a considerable number of instruments with solid wood construction throughout. As little as five years ago Indonesia appeared to be the place with some of the greatest potential for manufacturing low end student model guitars, but today it is becoming increasingly evident that the Indonesians are having difficulty competing with the Chinese who can manufacture in a drier climate conducive to production of solid wood as well as laminated instruments. The Chinese in addition have the advantage of a very well educated and highly motivated but low priced labor force. Whereas it took the Japanese many years to learn the craft of fretted instrument manufacturing, the Koreans picked it up in far less time largely due to being able to benefit from investment and training from Japanese companies. Indonesian manufacturing facilities set up by the Japanese were able to get into production even more quickly. Today the Chinese have the benefit of the cumulative experience of American, Japanese, and Indonesian manufacturers as well as CNC equipment with proper programming. I have no doubt that as time goes by we will see more and more Chinese fretted instruments of increasingly fine quality.
While technology has facilitated production of remarkably moderately priced instruments with better quality than ever before, human judgment and hand craftsmanship continues to play a major role in guitar manufacture. There are many operations such as binding and finishing which resist automation. It is virtually impossible to make really fine instruments unless the supervisors in the factories have a good understanding of how these guitars, banjos and mandolins are really supposed to look, feel and sound. In the USA and in Japan there is a strong domestic market for these instruments such that there are people at the factories who know how to play, thereby being able to ensure that their products are going to appeal to customers. By contrast, at least until very recently the Koreans had a strong domestic market for classical music such that they made good pianos and violins, but they had virtually no domestic market for guitars, banjos, or mandolins and all to often their instruments felt and sounded like stage props. Similarly there is no significant domestic market in Indonesia for fretted instruments and consequently factories there have very few people who really appreciate how these instruments are supposed to feel and sound. The Chinese have a strong domestic market for violins and consequently produce some remarkably fine bowed instruments but have less experience with fretted instruments. It should be noted, however, that the Koreans have in recent years made remarkable strides in improving the sound and playability of their fretted instruments and more recently the Chinese are showing that they too are extremely capable of rapid learning in this area.
While CNC equipment has been one of the major factors in changing large scale manufacturing operations (as little as twenty years ago Martin was still shaping necks by hand with a draw knife in the same manner they would have done in the 1800s), this same type of equipment is now being utilized even by individual hand builders to not only speed production but to improve precision. Operations such as cutting dovetail joints, routing for binding, and other repetitive tasks can be done not only more quickly but with far greater precision by CNC equipment than by hand. Even small one-man shops specializing in custom handbuilt instruments are making increasing use of small CNC machines which are now available at far more affordable prices than in the past. The use of such equipment permits a luthier to concentrate far more of his time on those operations which must be done by hand such as fine tuning the tap tones of tops and backs or applying fine French polish or varnish finishes. While most of the exhibitors at the NAMM shows have large to medium size factories, there are also exhibitors at the show with very small facilities set up to produce limited quantities of very high grade premium instruments.
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