Globalization has significantly reduced the world and customers can easily buy goods manufactured in other countries. Outsourcing is inevitable and many US multinational companies recognize and exploit the benefits of outsourcing. These companies open offices, factories or affiliates in countries such as China and India. Large-scale IT companies, including Apple, Microsoft, Oracle and Google, have opened and rented offices in Asian countries. Likewise, retailers and chained restaurants opened their businesses outside the United States. US multinational companies take advantage of outsourcing to maximize their profits by reducing costs, increasing sales, and avoiding taxes.
Outsourcing can help manufacturing companies reduce production costs by reducing labor costs. American manufacturing companies are eager to employ employees in Asian countries because manufacturing is much lower. In a article by Forbes published on January 25, 2012, Baizhu Chen pointed out that Apple's relatives at Foxconn employed 230,000 workstations for iPhone production in China. Average production wages have dropped seventeen times in China, and Apple saved billions of dollars in 2010. Similarly, Oracle, the third largest international software company, outsources thousands of jobs to various offices around the world to save labor costs.
As outsourcing reduces US manufacturing costs, it makes them more competitive by increasing sales and outstanding customer service. There is a large population in China and many Chinese people like to buy famous brand products like the iPhone. It is imperative that Apple produce iPhone in China. It does not only save time and money by producing products there, but also providing recovery and maintenance services. American chain restaurants have successfully opened outlets in China, such as KFC, Pizza Hut, and McDonald's. In general, large and wealthy cities, such as Shanghai and Wenzhou, open up in my native hometown. Chinese people in these cities like shopping and eating a variety of foods. Many people eat more outside home. In China, when I visit the KFC restaurant, it's always full of customers. These American chain restaurants definitely increase their sales and profits as they are popular and have a large number of buyers.
Outsourcing offers many opportunities for American multinational companies to avoid taxes by making use of low taxes or foreign countries tax. As the United States Tax Code allows multinational companies to gain profits by foreign contracts without paying US income tax, companies try to circumvent US and international accounting rules to avoid taxes. As Robert Oak mentioned in the article of the economic populist article of 21 September 2012 corporate tax in 1952 amounted to 32.1% of federal tax revenue, but now only 8.9% of federal tax Who. US multinational companies account for more than $ 1.7 trillion for pre-tax profits and these profits are considered as non-distributed foreign earnings. Outsourcing helps US multinational companies help avoid taxes.
As we can see, outsourcing is great because of competition and has gained tremendous benefits for US multinational companies by boosting sales and increasing profits. Although outsourcing has reduced the amount of income tax to the United States government, it signals US lawmakers that they have to rename the US corporate tax, lower tax rates, and adjust the corporate tax thresholds. The trend of outsourcing enables customers to purchase quality products at lower prices. Thus outsourcing can make a big contribution to customers.