Dealing With China Sourcing on a Global Level

| Posted: 29-08-2007 | Comments: 0 | Views: 13 | Rating: (50)

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While global sourcing has been a more and more popular way of cutting costs in International Trade, some corporations aren’t that successful simply because they have no idea how to deal with individuals from other countries. Westerners could sometimes face difficulties and they don’t seem to realize that business is not carried out the same way in the International trade, but that awareness is critical for companies who want to source products or services in International trade. China Sourcing can be particularly challenging for a business that doesn’t know to deal with a change in traditions and values other than their own culture.

One of the biggest hassles to overcome in International trade is the introductory phase. However, making connections can be difficult like in China and some other Asian countries. And people who provide these introductions will want a profit from the exchange. Westerners may find it as unethical, people in China don’t think so- it’s simply the cost of conducting business. So this is one of the issues facing China Sourcing and those companies who are interested in dealing with them.

The Chinese cement market is largest in the world and is expected to grow than the 2 consumer countries combined i.e. India and U.S. To keep in check the domestic inflation in the construction industry China Sourcing export restrictions of a product makes sense.

The Chinese government has all but removed its export support for high power consumers like cement, fertilizers and metal products. Moving from China Sourcing to Global Sourcing these changes will affect a lot of commodities. As exports are obstructed with stringent rules, the domestic China costs for these raw materials will become lesser. Steel prices are already low in China compared to the International trade making Chinese Suppliers more competitive on the world stage. China attempts to own more of the Global Supply chain for finished products by investing more to produce greater value products and assembles.

It was going to occur sooner or later. With the reaction against China quality and product safety, some innovative company was bound to take advantage of consumer fear against Chinese products. Someone has done just that. Many CPG providers are tagging their food, pharmacy and now even clothing accessories as organic and fair trade. One dietary supplements supplier is certifying that his products are 100% China free (ever heard of this) and its written dot on the label! Health International bigwigs for food have already warned that they will start labeling their dietary supplements with a label that reads as ‘safe’ and mainly ‘China-free’ following greatly publicized findings of contaminated food imports coming from China. Is this a cover for domestic producers to wrestle out of the competitive field of Chinese Suppliers?

China Sourcing well everyone’s into it although many do grumble about the risk factors.

Many U.S companies that have invested heavily in China Sourcing made about 80 billion U.S. dollars in sales revenue last year, with joint profits climbing to 10 billion U.S. dollars.

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