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Benefits And Drawbacks Associated With Importing Goods From China: Critical Recommendations
Each time we find the label "Made in China" we are reminded that China is a place where goods are produced for a fraction of the US cost and sold to over a billion potential consumers. Corporate giants such as Wal-Mart are investing heavily in China. Thousands of small to medium sized businesses are getting in on the action too. In fact, it can be said that 2000 was the decade that got thousands of entrepreneurs to study how to import goods from China.
China has enjoyed an average 9.5% annual growth during the past 10 years, and its Gross Domestic Product (GDP) skyrocketed from $ 300B in 1985 to $ 1,600B in 2004, higher than the state of California. In the meantime, its export-import volume has increased twelve-fold! Foreign direct investment has reached $ 550B within the same interval. China's blistering modernization from 1990-2010 made importing goods from China very attractive to retailers across the globe.
The country's first production census discovered that from 2004 to 2007, the GDP growth rate was of 10% annually. In 2007, the officially recorded GDP growth rate was 11.4 %. In 2008, the international economic crisis began to lower China's growth rate. In the face of these forecasts, the government decided to pump Rmb (China currency) 4 trillion into the economy in the form of an economic stimulus program consisting largely of investments in fixed infrastructure and human capital.
Even if in early September 2009 mainland China was engaged in new trade dispute with the US over the imposition of an emergency duty on Chinese tires, a serious trade war is unlikely as this is not in the best interest of both countries. Mainland China is the largest creditor of the US, while the US is the Mainland's second biggest export market after the European Union. A trade war among two of the world's biggest economies will also be detrimental to the global recovery just underway. China import export is here to stay, for now.
Northern Asia in general (Japan, South Korea, Taiwan, Vietnam, and Mainland China) is an excellent area for manufacturing products (Vietnam is like China fifteen years back).
The obvious advantage of Mainland China today lies in its low production, labor and better quality control measures, making it by far the most interesting place of the region.
In addition, remember that Chinese suppliers will provide you with what you ask, even if it is not within their production standards. They have an excellent ability to create a very creative design by combining several existing designs you might have submitted to them. While Westerners do not necessarily like (or are even able to) adapting their production standards to special customer demands, a Chinese company would consider this a standard feature of their service.
Sets of standards like ISO or 6-Sigma is not very common in China, but is implemented by the higher end vendors. However, regardless of your order quantity, quality control with China is a MUST. You must receive what you order and in the exact way you ordered it. From unsophisticated to complex products you need to monitor quality control with Chinese manufacturers. Implement multiple QC check points during different phases of manufacturing. An importer's worst nightmare is getting a full container load of merchandise that is defective because of a wrong screw size, for example. If you still try to market them, or sell merchandise that you don't know was designed wrong and later falls apart, this equals massive merchandise returns, angry customers, and an accounting/billing department nightmare. As the CEO of your own venture, you are responsible for ensuring that your products satisfactorily satisfy desired specifications.
Benefits And Drawbacks Associated With Importing Goods From China: Critical Recommendations
The clear advantage of Mainland China today lies in its low production, labor and improved quality control measures, making it by far the most attractive Asian country for importing.
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