Is the End of Cheap China the End of China for the West? Part I

The Procurement Leaders have a post up on China that you can view here See the little bit I have pasted below as well.

News – Large manufacturers shift operations from China to the US

According to a new survey by The Boston Consulting Group more than a third of US-based manufacturing companies with sales greater than $1bn are planning to bring back production to the United States from China.

Reasons cited included labour costs, product quality, ease of doing business and proximity to customers.

It is interesting to note the results from our April Procurement Leaders Intention survey which found that only 2% was intending to source fewer goods from China over the next six months.

Yes the news is mixed. Some companies back off and many dig in farther.  Surely as China matures the reasons for being in China change. Just being in China for low cost is ceasing to be effective.  Further, some companies have never really done well in China and now are finally pulling the plug.

I know a handful of big name companies that have stumbled around in China for years and never gotten the right culture to make things work. I know people who worked for ten years and washed their hands of China as had too many problems.

Yes, some people and some companies never really can figure out how to get the right leadership with the right support in China. It is sad to see.

I feel confident enough to say that  many of them should have read this blog and gotten on the ground help to get their thinking straight on China.

Companies that have good China based leadership and support them usually get ahead in China.  Admittedly, some companies are trying to sell to the government here or are restricted by the government in ways that makes it hard for them to succeed here at this time.  For example, Google.cn left China a while back due to limits that made it hard for them to succeed in their mission.  Most companies can succeed here if they think about it correctly.  It is not easy conceptually, but rewards await those who understand and engage China in business.

Welcome to go to China Business Leadership Group on LinkedIn to comment.

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Posted in: China, Culture Development, Leadership, Market Entry

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