China's dominance in manufacturing has extended to yet another frontier: virtual reality (VR) devices. Today, an estimated 90% of the world's VR devices are produced in China. But what exactly has led to this overwhelming concentration of production in one country? Several key factors explain China's stronghold on the VR manufacturing market.

1. Advanced Manufacturing Infrastructure

China’s industrial infrastructure is among the most developed in the world. Over decades of growth, the country has established a mature supply chain system, particularly in electronics and technology. This established network allows VR device manufacturers to source components like sensors, displays, and circuit boards more efficiently. Moreover, China’s advanced manufacturing hubs, such as Shenzhen, are renowned for their rapid prototyping capabilities, allowing companies to bring innovations to the market quickly.

2. Cost-Effective Labor and Efficiency
While labor costs in China have risen in recent years, they are still relatively lower than in Western countries, making it cost-effective for international companies to outsource production there. In addition, Chinese manufacturers have optimized production lines for high efficiency, often leveraging automation and robotic technologies to streamline VR device assembly. This combination of low labor costs and high efficiency has been key to China’s ability to maintain its dominant position in VR device production.

3. Strong Government Support
China’s government has long recognized the potential of emerging technologies such as VR. Through its "Made in China 2025" initiative, the government has prioritized high-tech industries, offering subsidies, tax incentives, and financial support to companies in the sector. Local governments have also created tech zones and innovation hubs to attract VR manufacturers. This level of support not only encourages domestic innovation but also draws foreign companies to set up production facilities in China.

4. Access to a Growing Domestic Market
China is home to one of the largest and fastest-growing consumer markets for VR devices. The country’s tech-savvy middle class is increasingly interested in new technologies like VR for entertainment, gaming, education, and healthcare. This booming domestic demand has attracted global VR companies like Meta, HTC, and Sony to partner with or manufacture in China, further driving production within its borders. Producing locally also reduces shipping costs and shortens the time to market for Chinese consumers.

5. Expertise in Consumer Electronics
China has long been the world's factory for consumer electronics, from smartphones to laptops. This expertise easily translates into VR device production. Chinese manufacturers like Goertek and Luxshare Precision, who already produce components for leading smartphone brands, are well-positioned to apply their knowledge to the VR industry. With years of experience and access to state-of-the-art technology, these companies can produce high-quality VR devices on a large scale.