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China Business » Information » Made in China Made in ChinaThis label, found on a high percentage of consumer goods around the world, is one of the most common labels that one can see in department stores. One expects to see this on the labels any more. Nearly every item on the lower-cost shelves is made in China.This speaks highly of China's importance in providing materials which everyone uses on a daily basis. China has a seemingly unending supply of cheap labour and materials to be fabricated into useful products. China seems to be one of the world leaders in manufacturing nowadays.  Although it seems as though China is the number-one choice of outsourcers, a closer look may reveal a problem in China's ranking on the list. For various reasons, China may be losing some of its customers to neighbouring Asian countries. Countries such as South Korea, Indonesia, Thailand and Vietnam are beginning to notice the commerce which China has been receiving from western outsourcing. All of these countries are now accepting bids from outsourcers and making promises which appeal to western companies. Not only are they accepting bids, but they are setting up zones in which to build factories. Their diligence in trying to attract foreign outsourcing contracts is paying off with some very large companies deciding to do their manufacturing elsewhere than in China. China's rapid growth in manufacturing has brought problems inside the country. China's seemingly unending supply of cheap labour is only in appearances. In fact, there are not enough qualified workers to go around so the result is rapid movement from one factory to another by the workers who are well-qualified. Also, wages have been going up in order to retain qualified workers. Costs of doing business in China are going up as well. A large percentage of factories are near the Chinese coastlines where land costs as well as rent are expensive. Some of the factories in China are trying to solve this problem by rebuilding factories in more interior areas of China. The Chinese government is cooperating in this initiative by urging factory owners to "go west". It is debatable that this is actually a good move since the goods which are produced in interior areas of the country still must be transported to the coast to be sent to worldwide destinations. This may bring the costs to nearly the same as if they had been produced in the more expensive coastal regions. Since much of the world is becoming aware of the problems of having everything made in China, many companies are allowing Chinese manufacturers to produce only part of their products whilst some of the products are being produced in one of China's competitor countries. These companies are deciding to not put all their eggs in one basket. No doubt, the Chinese leaders are working on the problems which have accompanied the growth of outsourcing in the country. In the meantime, perhaps the world will see fewer "made-in-China" labels and more labels from other Asian countries. Written on: 26th September 2007 Written by: R. Harris |
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