| | |
| China syndrome? | |
| 05 December 2008 The credit crunch, rising fuel, energy and food prices, declining housing market, weak pound, high interest rates, falling share prices, the list seems endless and makes gloomy reading for us all, especially in manufacturing. However, if you listen to some industry commentators you would believe that the blame lies solely with our Oriental cousins in China. Sure, the rapidly growing industrial economies of China and India (many people do not realise that the combined population of India and Pakistan is close to that of China) has put a huge demand on oil providers, which has created a global shortage, hence the unprecedented rise in oil prices. So I thought that I would present a more balanced view. According to the China Importers Guide dated April 2007, over the last 25 years China has enjoyed sustained growth in its economy and has seen vast increases in foreign trade with exports rising to a mind-boggling level in 2006 of some $288 billion! China now exports a wide variety of products to a vast number of countries around the globe. A huge number of the products that we now purchase have been manufactured in China, particularly anything made from plastics. It is apparent to anyone with even a passing interest in economics that in most cases it is far cheaper for many UK based companies to have some or all of their products made in China but this has resulted in a steep decline in British manufacturing. Again, grim reading, howeer, is this a terminal decline or is it just cyclical? Perhaps the Chinese have eaten too many of their fortune cookies and their luck will one day run out? There has been a great deal of negative press surrounding products exported from China in the last few years. For example, in July 2007, there were a number of safety scares reported in the international press with the main concerns being related to food produce, however, there were product scares too and among those listed were faults with vehicle tyres that, dangerously, had the potential to cause blow-outs, toys that could cause young children to choke and ceramic heaters with potential fire safety risks! This lead to many asking whether enough was being done in terms of health and safety and quality control to protect consumers. Latterly, we have also seen a great deal of negative press surrounding China leading up to, and during, the Olympics and the regime's right to stage such a global event that portrays fairness, harmony and friendship when their human rights record and horrific treatment of Tibetan monks is the antithesis of the Olympic ideal. So how has China strengthened its economy so quickly? Simply by offering, mainly the west, mass production at a far cheaper price than virtually anywhere else in the world through cheap labour and manufacturing costs, but can it be sustained? China has unwittingly created a problem for itself by the pure speed of its expansion into the global market but it has not been balanced with a growth of a sensible countrywide regulatory quality control infrastructure. This, in the main, is what has lead to earlier product safety scares. Accepting the majority of scares have been food related, which do not affect the bathroom and kitchen markets, the negative publicity has still created scepticism by the UK populace of the overall quality of products imported from China. Chinese authorities will argue that they are making every effort to improve the implementation of safety standards and quality control but that it will take years for them to catch up with the west. Many UK manufacturers and suppliers who have imported products from China have tried to overcome these problems by setting up their own plants in China and implementing British manufacturing standards however, this inevitably makes them less competitive on price. Moreover, how do consumers know whether an imported Chinese product has been manufactured in conjunction with a UK supplier or is just one of a container load shipped in by a 'one man band' importer sourced through a Chinese manufacturing agent that he had met on a business trip to Hong Kong? Perhaps we will see a pattern rather like the organic food market. At the start there were people up in arms as they did not want to pay high prices for organic produce. However, as time has gone by and we are subjected to media reports about pesticides and what is actually in our food, sales have increased substantially in recent years. Although products that have been manufactured in China will ultimately be offered at a cheaper price point, products manufactured in the UK are often of a higher standard. The point should not however be forgotten, that many of us have been sourcing products from China for many years and have been pleased with what we have received. What is imperative is that we as UK manufacturers ensure that we offer guarantees of quality in performance and sustainability that are closely adhered to. This way the customer receives a quality product with an exemplary service. Another factor to consider in today's climate is the environmental impact that exporting may have. The media have made climate change an issue that is impossible to escape for manufacturers, retailers and consumers alike. If consumers are more aware of environmental impact then they are more selective in terms of who they but from and want to know more so than ever before where the product in questions has been sourced from or manufactured. All the more reason to trust British manufacturers, who you know will have had to adhere to rigorous guidelines. Have your say: letters@kbbreview.com | |






