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Advantages And Disadvantages Associated With Importing Products From China: Critical Considerations
Every time we see the label "Made in China" we are reminded that China is a place where goods are manufactured for a fraction of the US cost and distributed 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, 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 within the past decade, and its Gross Domestic Product (GDP) increased from $ 300B in 1985 to $ 1,600B in 2004, higher than the state of California. Meanwhile, the 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 highly 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 began to lower China's growth rate. To settle the crisis, the government made the decision to pour Rmb (China currency) 4 trillion into the economy in the form of an economic stimulus program consisting mostly of investments in fixed infrastructure and human capital.
Although 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 full-blown trade war is almost impossible as this is not in the best interest of both countries. Mainland China is the largest creditor of the US, and the US is the Mainland's second largest export market after the European Union. A trade war between two of the world's leading economies will additionally be harmful 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 very good place for manufacturing products (Vietnam is like China fifteen years back).
The clear value of Mainland China today comes from the low production, labor and better quality control procedures, making it by far the most attractive place of the region.
In addition, bear in mind that Chinese companies will deliver you with what you demand, even if it is not within their production standards. They possess an outstanding ability to create a very unique design by blending some existing concepts you might have submitted to them. While Westerners do not necessarily like (or are even capable to) adjusting their production standards to special customer requirements, a Chinese company would consider this a standard feature of their service.
Standardization such as 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 receive what you order and in the exact way you ordered it. From unsophisticated to sophisticated products you have to oversee 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 merchandise that is defective because of a wrong screw size, for example. If you still try to sell them, or sell goods that you don't know was defective and later falls apart, this means 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 satisfactorily meet desired specifications.
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