Many journalists wrote about the new tariffs, how the situation will likely evolve over the next few months, and who the winners and losers might end up being. What I realized is, this situation is helping Beijing accelerate the transition of their manufacturing sector toward higher technologies. Let's look at 3 events that all point to this. 1. The US is stopping trade talks with China (published yesterday) For years, the US has complained American companies can’t fairly compete in … [Read more...]
Tips for Recruiting Good Talent For a China Factory or Buying office
Recruiting the right people is always a challenge for foreign companies in China. We have struggled quite a bit ourselves. I had the opportunity to ask a few questions to Jim Nelson, the president of SHI Group, a China-based recruitment agency. He writes a blog on his website and has a say-it-like-it-is approach that I like. Q: One position I see many Chinese manufacturers struggle to fill is that of the quality manager. The good ones are often in the 40-60,000 RMB range. What has been your … [Read more...]
Is There a Future for Manufacturing in China?
[This is a guest post by Fredrik Gronkvist, who writes great advice on chinaimportal.com.] Ever since I first set foot in China, back in 2009, I felt that I was late to the party. Ever since that dreadfully hot day in August, I’ve kept hearing that it’s only a matter of time before the country is priced out of the manufacturing game, and is ready to step up to more lucrative activities. About one year ago I was sitting down with two friends from back home, who were visiting Shanghai for a … [Read more...]
Do Many Amazon Products Come Right From Alibaba in China?
Yahoo Finance recently ran an article entitled Think you’re buying on Amazon? It’s actually from Alibaba. A few people in the US noticed that many products they can buy on Amazon.com can also be found on Alibaba.com. Let's unpack their differences: Amazon.com is a B2C marketplace that sells to consumers. Very often, products are bought 1 at a time. Alibaba.com is a B2B directory that serves as advertising to manufacturers and trading companies. I would guess the average order is in the … [Read more...]
Beijing’s Efforts at Upgrading its Manufacturing Sector by 2025
The European Union Chamber of Commerce in China just published a report entitled China Manufacturing 2025.It is well researched and well written. It starts by describing the current situation: For a generation China has been the factory of the world. In 2015, it produced or assembled: 28% of the world’s automobiles; 41% of the world’s ships; 80%+ of the world’s computers; 90%+ of the world’s mobile phones; 60% of the world’s colour TV sets; 50%+ of the world’s … [Read more...]
Chinese Factories Designing, Branding, and Selling on Amazon: Q&A
I wrote before about the challenges of Chinese factories to sell on Amazon. And yet, it seems to be an emerging trend. I asked Fredrik Gronkvist (from China Importal), who has also been observing the latest trends, for his opinion on this. Q: Ten years ago, Chinese factories ‘made to order’, and seeing one of them ‘make to stock’ was a rare occurrence. Have you seen more and more manufacturers 'make to stock’? What do they do with it? First, Chinese manufacturers still ‘make to order’ and I … [Read more...]
Dongguan Factories: Is there Light at the End of the Tunnel?
Dongguan city is just North of Shenzhen, yet it is a different city in nearly every respect. As I pointed out last week, there is no real center. Dongguan is composed of 32 towns that are quite spread out (going from one side of Dongguan to the opposite side takes more than an hour by car). Some will say there is a downtown area (Dongcheng, Nancheng) where renting an apartment is about as expensive as in downtown Guangzhou or Shenzhen. Yet I don't consider it as Dongguan's … [Read more...]
Why Chinese Factories Focus on Inspection, Not Improvement
In an article I wrote on the CMC blog (China Manufacturing Quality Control: Cost Case Study), I broke down the typical costs of the quality organization in a medium-size Chinese factory. I addressed 2 common misconceptions: To reach a higher quality level, the factory has to do more inspection; The quality department's job is to inspect products before shipment, to avoid big issues with customers. A reader sent us a note that explains why, in his eyes, average small/medium sized … [Read more...]
Shenzhen, the Best City in China for Manufacturing?
Many Hong Kong people still shriver when they hear "Shenzhen". It used to be a very poor patch of land along their border with the mainland. Unsurprisingly, Hong Kong people were seen as an easy target for some Shenzhen criminals. But things have changed a lot. Nowadays, most Shenzhen residents are happy with their lives. When they visit Hong Kong, they wonder how people can survive in such a tiny, cramped environment, where the basic necessities of life are so expensive. Recently a bunch … [Read more...]
Latest Trends in China Sourcing, Compliance, and Quality Control
There have been a couple of interesting articles about future trends in China manufacturing. Dan Harris on the China Law Blog pointed to a well-researched WSJ article (How China Is Changing Its Manufacturing Strategy -- It hopes to keep low-cost factories and attract high-end ones). The author argues that manufacturers of low-cost, low-complexity items have, for the most part, not disappeared in China. The central government is concerned about losses of low-end manufacturers to other … [Read more...]
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