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Pros And Cons Of Importing Products From China: Critical Factors
Whenever we see the tag "Made in China" we are reminded that China is a place where goods are manufactured for a fraction of the US cost and sold to more than a billion potential buyers. Corporate giants like Wal-Mart are investing heavily in China. Thousands of small to medium sized companies are getting in on the action as well. In fact, we can say that 2000 was the decade that got thousands of entrepreneurs to investigate 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) increased from $ 300B in 1985 to $ 1,600B in 2004, larger than the state of California. Meanwhile, the foreign trade volume has increased twelve-fold! Foreign direct investment has hit $ 550B during the same period. China's blistering modernization from 1990-2010 made importing goods from China very interesting to retailers worldwide.
The country's first production census found that from 2004 to 2007, the GDP growth rate was of 10% annually. In 2007, the formally recorded GDP growth rate was 11.4 %. In 2008, the global economic crisis started to reduce China's growth rate. In the face of these forecasts, the government made the decision to pour Rmb (China currency) 4 trillion into the economy as an economic stimulus program consisting primarily of investments in fixed infrastructure and human capital.
Although at the beginning of September 2009 mainland China was engaged in new trade dispute with the US over the imposition of an emergency duty on Chinese tires, a full-blown trade war is almost impossible as this is not in the best interest of each of those countries. Mainland China is the largest creditor of the US, and the US is the Mainland's second largest export destination after the European Union. A trade war between two of the world's biggest economies will furthermore be bad to the global recovery just underway. China import export is here to stay, for the moment.
Northern Asia commonly (Japan, South Korea, Taiwan, Vietnam, and Mainland China) is a fantastic place for manufacturing products (Vietnam is the same as China fifteen years ago).
The clear advantage of Mainland China today comes from the low production, workforce and better quality control practices, making it by far the most attractive part of the region.
Moreover, bear in mind that Chinese suppliers will give you with what you request, even when it is not within their production standards. They possess a great competence to create a very unique design by combining some existing ideas you might have submitted to them. While Westerners do not normally like (or are even capable to) adjusting their production standards to special customer requirements, a Chinese company would look at this a standard feature of their service.
Standardization like ISO or 6-Sigma is not so popular in China, but is followed by the higher end companies. However, regardless of your order volume, quality control with China is a MUST. You need to get what you order and in the exact way you ordered it. From unsophisticated to sophisticated products you need to check quality control with Chinese vendors. Use multiple QC check points during different stages of production. An importer's worst nightmare is receiving a full container load of products that is defective due to 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 brings substantial product returns, angry customers, and an accounting/billing department nightmare. As the Supervisor of your own company, you are responsible for making sure that your products satisfactorily meet desired specifications.
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