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Pros And Cons Of Importing Products From China: Important Considerations
Every time we see the label "Made in China" we are reminded that China is a place where various items are manufactured for a fraction of the US cost and sold to more than a billion potential consumers. Corporate giants like Wal-Mart are investing intensely in China. Thousands of small to medium sized businesses are getting in on the action as well. 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% yearly growth during the past decade, and its Gross Domestic Product (GDP) skyrocketed from $ 300B in 1985 to $ 1,600B in 2004, higher than the state of California. Meanwhile, its foreign trade volume has increased twelve-fold! Foreign direct investment has reached $ 550B within the same period. China's blistering modernization from 1990-2010 made importing goods from China very interesting to retailers across the globe.
The country's first production census found that from 2004 to 2007, the GDP growth rate was of 10% each year. 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 made the decision to pump Rmb (China currency) 4 trillion into the economy in the form of an economic stimulus plan consisting mostly of investments in fixed infrastructure and human capital.
Even if in early September 2009 mainland China was engaged in new trade problem with the US over the imposition of an emergency duty on Chinese tires, a full-blown trade war is unlikely as this is not in the best interest of both countries. Mainland China is the number one creditor of the US, while the US is the Mainland's second largest export market following the European Union. A trade war between two of the world's biggest economies will furthermore be detrimental to the global recovery just underway. China import export is here to stay, for now.
Northern Asia commonly (Japan, South Korea, Taiwan, Vietnam, and Mainland China) is a great area for manufacturing products (Vietnam is like China fifteen years back).
The clear advantage of Mainland China today comes from its low production, labor and advanced quality control procedures, making it by far the most interesting place of the region.
In addition, bear in mind that Chinese suppliers will give you with what you ask, even if it is not comply with their production standards. They have an excellent ability to produce a very unique design by combining some existing designs you might have submitted to them. While Westerners do not necessarily like (or are even capable to) adapting their production standards to special customer requirements, a Chinese company would consider this a standard characteristic of their service.
Standardization like ISO or 6-Sigma is not so common in China, but is followed by the higher end producers. However, regardless of your order quantity, quality control with China is a MUST. You need to receive what you order and in the exact way you ordered it. From simple to sophisticated products you need to check quality control with Chinese manufacturers. Use multiple QC check points during different stages of manufacturing. An importer's worst nightmare is receiving a full container load of merchandise that is defective because of a wrong screw size, for example. If you still try to sell them, or sell merchandise that you don't know was defective and later falls apart, this equals substantial product returns, angry customers, and an accounting/billing department nightmare. As the Chairman of your own company, you are responsible for ensuring that your products adequately meet desired specifications.
Pros And Cons Of Importing Products From China: Important Considerations
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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