China, still an ideal place for your Stratetic Sourcing

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As for strategic sourcing personnel, taking the long term cost saving into consideration, a place which could provide comparatively lower cost but good quality products would be an ideal place for them to go.

There is no doubt that many plants are built in China’s neighboring countries in recently years, while China is still your ideal place for your sourcing. Besides the regular reasons, e.g. rich natural resources, skilled workers trained by famous international brand, mature matching industries, there are other distinctive reasons like follows;

Firstly, with the development of China’s economy, the government inject much more capital on the infrastructure than before. You might still have the impression that the suppliers are far away from your familiar cities, like Shanghai, and it took longer time if you wanted to visit your suppliers after you landed in airport of Shanghai. More and more High Speed Train, freeway have been built, which not only speed the convenience of business traveling but also makes the transportation much more economic. For manufacturers, the related services are easier to get than before.

Secondly, the Chinese government takes more measures to help reduce the manufacturers’ cost. E.g. VAT reform, which is downed from 16% to 13%; help offer loans with preferential terms to enterprises; encourage them to cooperate with hi-tech companies to learn more from them so as to save the cost and increase output; further encourage them to innovate to provide higher quality product to ensure success in growing market.

Thirdly, thanks to the “Belt and Road”, we have the third choice to have the goods transported to overseas through the train. In the past,most exports goods are shipped either by sea or by air to overseas. And the transportation cost changes dramatically due to the container demand or the shipping company’s strategy. If there is a urgent demand with large volume, it is impossible to help the customers to save the transportation cost by air. Comparing with the airplane, the transportation by sea is much economic. But, it is on condition that you do have enough lead time. You are no longer bound to the sea and the air only. You have the chance to make a comparison so as to save your cost, speed your shipment and it is also good for you to get price advantage in your final product.

Fourthly, new import processes of customs clearance, integration of customs clearance, helping businesses cut costs substantially. 

Fifthly, in recently years, China puts premium on intellectual property (IP). The government issues more policies to protect intellectual property, which is greatly good to protect both the customers and the suppliers’ interest.

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If you are making strategic sourcing, China is still an ideal place!