Originally from: https://intrepidsourcing.com/china-refuses-to-budge-on-high-tech-tariff-deal/
Last month, their faces beaming with self-congratulatory enthusiasm, President Obama and China’s president, Xi Jinping, announced an agreement to drop tariffs on a range of high-technology products. On Friday, those talks on technology trade collapsed in acrimony, a sign that China is still unwilling to open its markets to competition where it is most vulnerable.
The Geneva talks aimed to reduce global tariffs on $1 trillion in high-tech goods, and experts say a breakthrough could have saved as much as $15 billion a year in tariffs and generated hundreds of thousands of jobs across the globe.
Though the United States still exports many high-technology goods, China is now the world’s dominant exporter of electronics and has much to gain from an elimination of tariffs. Nonetheless, Beijing protects companies in important industries (like semiconductors and LCD displays) that are not as competitive internationally as many of China’s other products.
Tuesday, 30 October 2018
Qualcomm Settles with China, for now
Originally from: https://intrepidsourcing.com/qualcomm-settles-with-china-for-now/
The settlement of China's anti-trust probe into Qualcomm Inc will intensify global scrutiny of the firm's highly profitable patent licensing business as China's National Development and Reform Commission (NDRC) will finish its 13-month investigation about the U.S. chipmaker.
The NDRC, one of China's anti-trust regulators, has said it suspects Qualcomm of overcharging and abusing its market position in wireless communication standards. Qualcomm is expected by industry sources to agree to changes in how it charges royalties on cellphones sold in China based on the fact that Qualcomm earned about half of its global revenue of $26.5 billion in China for the fiscal year ended Sept. 28.
The settlement of China's anti-trust probe into Qualcomm Inc will intensify global scrutiny of the firm's highly profitable patent licensing business as China's National Development and Reform Commission (NDRC) will finish its 13-month investigation about the U.S. chipmaker.
The NDRC, one of China's anti-trust regulators, has said it suspects Qualcomm of overcharging and abusing its market position in wireless communication standards. Qualcomm is expected by industry sources to agree to changes in how it charges royalties on cellphones sold in China based on the fact that Qualcomm earned about half of its global revenue of $26.5 billion in China for the fiscal year ended Sept. 28.
Japan's Government Stimulus: Another Try
Originally from: https://intrepidsourcing.com/japans-government-stimulus-another-try/
Japan’s government approved a stimulus bill worth $29 billion aimed at helping the country’s lagging regions and households through steps like subsidies and merchandise vouchers. Analysts are skeptical about how much growth the government can spur.
The government said it expected the stimulus plan to increase Japan’s gross domestic product 0.7 percent, ¥1.8 trillion will be spent on poor families and small companies as well as ¥1.7 trillion will be used for disaster prevention and rebuilding disaster-hit areas; however, Masaki Kuwahara, a senior economist at Nomura Securities, said that it could push up G.D.P. about 0.2 percent.
Japan’s government approved a stimulus bill worth $29 billion aimed at helping the country’s lagging regions and households through steps like subsidies and merchandise vouchers. Analysts are skeptical about how much growth the government can spur.
The government said it expected the stimulus plan to increase Japan’s gross domestic product 0.7 percent, ¥1.8 trillion will be spent on poor families and small companies as well as ¥1.7 trillion will be used for disaster prevention and rebuilding disaster-hit areas; however, Masaki Kuwahara, a senior economist at Nomura Securities, said that it could push up G.D.P. about 0.2 percent.
China's Stock Marketing Thriving
Originally from: https://intrepidsourcing.com/chinas-stock-marketing-thriving/
China has been grappling with a slowing economy, falling property prices and increasingly tight financing conditions; however, the country’s stock markets have been surging. Moreover, ordinary Chinese have been piling into the market at a pace unseen since 2007. Investors in Shanghai and Shenzhen opened nearly 900,000 new stock trading accounts in the week that ended Dec. 12 alone-the most in 7 years.
After several lackluster years, Shanghai’s benchmark stock index now ranks as the best-performing major index in the world, surpassing 3,100 points — the highest level in nearly 5 years. In addition, Brokerage firms in China, the largest of which are state-controlled, have been riding high on the rally as well; however, Anne Stevenson-Yang, a co-founder of J Capital Research in Beijing said “There’s so much leverage in the market now that it’s really easy for it to become very volatile”.
China has been grappling with a slowing economy, falling property prices and increasingly tight financing conditions; however, the country’s stock markets have been surging. Moreover, ordinary Chinese have been piling into the market at a pace unseen since 2007. Investors in Shanghai and Shenzhen opened nearly 900,000 new stock trading accounts in the week that ended Dec. 12 alone-the most in 7 years.
After several lackluster years, Shanghai’s benchmark stock index now ranks as the best-performing major index in the world, surpassing 3,100 points — the highest level in nearly 5 years. In addition, Brokerage firms in China, the largest of which are state-controlled, have been riding high on the rally as well; however, Anne Stevenson-Yang, a co-founder of J Capital Research in Beijing said “There’s so much leverage in the market now that it’s really easy for it to become very volatile”.
Some Tricks Of The Trade in China Payment Terms
It is true that most Chinese companies casually change the payment schedule, when they hold all the financial leverage they have little motivation to adhere strictly to the contract terms. Therefore, people should take 3 factors into consideration when it comes to payments:
- Make the terms of payment as concise and clear as possible: This is really for the benefit of both parties. In addition, the calendar should show a given date, a project phase has been completed, or a prototype has been delivered.
- Demand a nontrivial amount upfront, and confirm payment before they even lift a finger: It’s not only a show of good faith by the Chinese side; but also to prove that the Chinese side can in fact make a payment on the contract.
- Add 10% to their charge and include it as a final payment due after delivery: Due to the fact that Chinese companies insist on receiving delivery in full before making the final payment – and then never make that final payment.
Managing Quality Control In China
Most companies employing their own inspectors in China are unsatisfied about the behavior and/or their working methods of some of their QC staff. Why? There are three reasons why managing quality inspectors is hard:
Second, give them training in the procedure to follow. I mean give them pointers in the field, coach them, and give them immediate feedback. Third, give them working documents that support the procedure to follow: have them fill out a form Ideally they would fill out a form that follows the steps, one by one.
Unfortunately all this indicates you should hire more junior inspectors and train them the right way, However, each situation is unique.
- Monitoring: They often do their work “in the field” and alone. It is hard to keep an eye on what they are doing.
- Poor Human Resources: Experienced hands with bad habits reinforce bad procurement habits.
- Personality Type: People who go into an inspector role like repetitiveness. They like knowing what to do and doing it repeatedly. Having them change their approach is difficult.
- Suppliers often bribe and pressure inspectors
- Chinese employees are good at “gaming the system”;; auditing them is insufficient to uncover wrong behaviors.
What is the biggest source of unreliability?
By far biggest source of unreliability is the fact that inspectors believe in their "intuition". They improvise every time when it comes to checking a product’s appearance. Moreover, many sourcing agents allow firm to perform time-consuming tests themselves. Unfortunately, their intuition fails time and again.Professionals should trust their intuition when the environment is stable over time and when they get regular feedback. The typical inspector scenario is as follows:- Stable over time? Yes.
- Frequent and clear feedback? No!
Manage QC inspectors
First, design a procedure to follow. If you think “we hire experienced inspectors so they know how to do their job”, you are doing this wrong. You are effectively giving your freedom without any guidelines.Second, give them training in the procedure to follow. I mean give them pointers in the field, coach them, and give them immediate feedback. Third, give them working documents that support the procedure to follow: have them fill out a form Ideally they would fill out a form that follows the steps, one by one.
Unfortunately all this indicates you should hire more junior inspectors and train them the right way, However, each situation is unique.
China's Specialized Manufacturing Goes from Strength to Strength
While in recent months China’s manufacturing sector has begun to stagnate, not all sectors are experiencing this effect. June saw across industries that the level of manufacturing remained steady over the whole of the month, an on-going trend that was in line with expectations. The entire economy of China has been expecting a slow changeover from the previously export dominated economy to a more service based one, which is a trend that is gradually taking effect as the service industry saw a rise in activity levels in the same period.
One key change expected to arise from this changeover is the focus moving away from cheaply produced manufactured goods to a more specialised and technical nature. China is well known globally for their ability to offer cheap exports; however, this advantage has become threatened by other Asian countries like India or Vietnam, who can often undercut prices in China. For this reason, China has started to focus on trying to add value to their manufacturing sector, and recent news within the last few weeks have suggested that this process is making serious moves forward.
The integrated circuits (IC) sector is an industry that requires a quite high technological level, which China is making serious progress in. In 2010, the industry was valued at $21.03billion in China, while this figure has risen year on year, and in 2015, the production value had reached $57.97billion with another predicted increase of 15% again in 2016, hitting $66.64billion. Despite that the smartphone industry is starting to stall, a current key sector that heavily relies on IC’s, the Chinese government is still investing heavily into this area because ICs are seen as a strategic industry for many products in the future. Therefore, it announced the development of a state-level integrated circuit base project in March. The government is committing serious sums of money, with the goal of reaching the technological level of other international leaders in this sector.
While the IC industry in China is an area seeing heavy investment from their own government, that is not to say there are no foreign investors who believe in the upcoming manufacturing sector of the country. For instance, Apple already trusts Chinese manufacturer Foxconn to produce their iPhone despite of comparatively high assembly costs, and more recently, innovative car manufacturer Tesla appears to be setting to base one of their major production lines in the city of Shanghai.
While nothing has been confirmed yet, there has been whispers that Tesla is ready to enter into a joint venture with Jinqiao Group - a huge deal that would see each company commit $4.5billion to the project. The investment would not only create the mentioned production line, but also includes nationwide Tesla dealerships being created, a more importantly in this context a large research and development centre as well as the elaboration of charging platforms for the vehicles.
A partnership of this type would allow Tesla to enter into the Chinese market avoiding import levies, and is a traditional route for car manufacturers previously being taken by most major companies like Ford and Volkswagen, who produce most of their cars for the Chinese market in China now. In turn, it would give China’s Tesla suppliers a lot of know-how.
E-Commerce Giant Pledges to Fight IPR
In recent history, China has had an unflattering reputation related to counterfeit production and intellectual property rights (IPR) infringement. This culture within China has even been embedded in the term “Shanzhai” and underlines the relaxed attitude towards this area. Since 2001, when China joined the World Trade Organization (WTO) progress has been made. Now the country is bound by the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, but the country still needs to work further protections to be enforced.
However, leading Chinese E-commerce giant Alibaba Group have recently unveiled a new online system that should increase the rate of success in detecting counterfeit goods being sold through their platforms. Previously the firm had come under significant pressure from foreign brand owners who believed the company were not doing enough to prevent sales of counterfeit goods.
While the chief platform governance officer Zheng Junfang at Alibaba conceded the company was unable to effectively detect all counterfeit products on the platform, she stated the ‘only choice is to join forces to fight counterfeit products’. Hopefully with the introduction of Alibaba’s new system, the authenticity of products should be easier to identify and if there is an infringement determined, it will be brought to the groups attention.
The new system also goes a step further, and will work in partnership with the owners of brands if there are suspicious products identified. Currently over 180 different brands, including Panasonic and Louis Vuitton have agreed to be part of the project.
In recent times, Alibaba Group has received large amounts of criticism globally for failing to actively manage counterfeits being sold on their platform. In May, Alibaba Group was suspended as a member from the International Anti-Counterfeiting Coalition, an organization that acts as a watchdog for the retail industry. Furthermore, other companies such as Kering (the French fashion company owning Gucci and many other brands) have previously filed lawsuits against Alibaba, insinuating they encourage counterfeit and knock-off goods as the e-commerce site profits from these sales.
While this new initiative can only be regarded as a positive move, the problems of IPR go much deeper than online e-commerce platforms. Currently it can be extremely difficult for a foreign brand owner to enforce their IPR if their products are being ripped off in China. Assuming the company has correctly registered their trademarks with the China Trademark Office, difficulty can still arise in receiving enforcement action. This can be partly due to the differentiation between what is considered a knock-off and what is considered to be a counterfeit. If a company is purposely creating counterfeits, defined as a product purposely trying to imitate another aiming to be passed off as authentic. Whereas a knock-off is mainly a refined product based on the original design, with many Chinese citizens not considering it to be stealing.
Toxic Debt at Home Makes Chinese Firms Secure UK Assets
Good news all around for the China business world as confidence seems to be rising among companies and entrepreneurs alike. According to China's Central Bank the business confidence index rose up to 51.2% in the third quarter. The index is a measure used by the bank to indicate the amount of optimism by managers and workers about their company’s general outlook.
While the economy has been a little sluggish over the course of the year, owing due to a period of change, latest news suggests positivity. Retail sales grew above expectations for the month of August, as did factory output levels. These areas have been helped by consistent government spending on infrastructure as well as a strong housing market.
The deal agreed may also help further the relations between the UK and China. With the uncertainty surrounding the UK considering its exit from the EU, the country may be an attractive trading partner for China. While many experts suggested the relationship between the countries was a way for China to get access to the overall EU market, this move should be one of many to come which suggest otherwise.
CGN have already confirmed they continue their interest in another site planned by the UK for a nuclear power plant. While this current agreement has gone through turbulent times with many stops and starts, CGN is optimistic further agreements will happen more quickly. Others disagree though, with a decade being seen as a reasonable timeframe before any construction begins.
It is the continued frequency of moves by Chinese companies entering into international markets that is really starting to make waves. The sheer size and power of the Chinese economy has enabled the country to strategically set up positions in other countries. While the UK government balked at the sheer cost of a new power station, Chinese firms may continue to provide investment in other countries who are unwilling to pay themselves.
While many are questioning the long term sustainability of the growth seen throughout China, there is no doubt that the country will make its mark internationally. It is true growth is beginning to slow down, but the changing basis of the economy may open up new areas which can revive the currently stuttering situation. As many other economies globally are still feeling the strain follow the financial crisis and shortly after Eurozone crisis, China continues to be the flame that burning
While the economy has been a little sluggish over the course of the year, owing due to a period of change, latest news suggests positivity. Retail sales grew above expectations for the month of August, as did factory output levels. These areas have been helped by consistent government spending on infrastructure as well as a strong housing market.
Nuclear Power
Official government expectations are still on track to be met, with the International Monetary Fund (IMF) suggesting a 6.6% growth in the nations GDP, in line with the 6.5-7% target originally set. The country has also hit international headlines around the world following the state firm CGN committing around $8bn to help build a nuclear power station in the UK. However, the firm is not only providing a third of the overall investment, they have been awarded exclusive rights to design the reactor for the plant. This continues to show the advancements being made by China, and while the country has made its name on cheap exports, shows the countries specialized capabilities.The deal agreed may also help further the relations between the UK and China. With the uncertainty surrounding the UK considering its exit from the EU, the country may be an attractive trading partner for China. While many experts suggested the relationship between the countries was a way for China to get access to the overall EU market, this move should be one of many to come which suggest otherwise.
CGN have already confirmed they continue their interest in another site planned by the UK for a nuclear power plant. While this current agreement has gone through turbulent times with many stops and starts, CGN is optimistic further agreements will happen more quickly. Others disagree though, with a decade being seen as a reasonable timeframe before any construction begins.
It is the continued frequency of moves by Chinese companies entering into international markets that is really starting to make waves. The sheer size and power of the Chinese economy has enabled the country to strategically set up positions in other countries. While the UK government balked at the sheer cost of a new power station, Chinese firms may continue to provide investment in other countries who are unwilling to pay themselves.
While many are questioning the long term sustainability of the growth seen throughout China, there is no doubt that the country will make its mark internationally. It is true growth is beginning to slow down, but the changing basis of the economy may open up new areas which can revive the currently stuttering situation. As many other economies globally are still feeling the strain follow the financial crisis and shortly after Eurozone crisis, China continues to be the flame that burning
Chinese New Year 2017
The Chinese New Year of 2017 starts on Saturday, January 28th. The earliest New Year in China since 2012. With such a short gap between the Western holiday season ending and the Chinese New Year beginning, disruptions may occur.
Western countries usually see a minimal holiday shutdown. Christmas is guaranteed, but a whole week of inactivity is rare. However, in China, the Chinese New Year is seen as a major event. Total production shutdowns can last up to one month. Factory workers enjoy taking an extended break. The Chinese New Year may only last 2 weeks, but workers finish a few days before, and can return weeks after the official end date. Production levels should return to normal by 3-4 weeks after Chinese New Year.
Confirming last order dates may be wise. Usually the beginning of December is last orders. If you have a strong relationship with your supplier, you may have already been informed. Products that are seasonal in nature are at the highest chance of risk. Increased lead time over this holiday period may see spring and summer based products arrive too late. Tight schedules shouldn’t be relied upon. Confirm the last call for orders as soon as possible.
In the event production is not possible within your timeframe, don’t halt business activities on your end. While production will be stopped, other departments remain open. Continue to negotiate, design products and work with your Chinese counterparts in other areas. Due diligence and market research can also be carried out. Production stopping does not mean you have to waste time in all areas.
Remember to mitigate as much risk as possible. Select suppliers do not reopen following the New Year. Hence, if delivery will not be prior, then refrain from placing a deposit. Suppliers promising extremely quick turnarounds are also unlikely to deliver. Preying on desperate companies some scam suppliers will promise short lead times but do not preform.
Western countries usually see a minimal holiday shutdown. Christmas is guaranteed, but a whole week of inactivity is rare. However, in China, the Chinese New Year is seen as a major event. Total production shutdowns can last up to one month. Factory workers enjoy taking an extended break. The Chinese New Year may only last 2 weeks, but workers finish a few days before, and can return weeks after the official end date. Production levels should return to normal by 3-4 weeks after Chinese New Year.
Confirming last order dates may be wise. Usually the beginning of December is last orders. If you have a strong relationship with your supplier, you may have already been informed. Products that are seasonal in nature are at the highest chance of risk. Increased lead time over this holiday period may see spring and summer based products arrive too late. Tight schedules shouldn’t be relied upon. Confirm the last call for orders as soon as possible.
In the event production is not possible within your timeframe, don’t halt business activities on your end. While production will be stopped, other departments remain open. Continue to negotiate, design products and work with your Chinese counterparts in other areas. Due diligence and market research can also be carried out. Production stopping does not mean you have to waste time in all areas.
Remember to mitigate as much risk as possible. Select suppliers do not reopen following the New Year. Hence, if delivery will not be prior, then refrain from placing a deposit. Suppliers promising extremely quick turnarounds are also unlikely to deliver. Preying on desperate companies some scam suppliers will promise short lead times but do not preform.
Networking To Find A Chinese Supplier
Dependable suppliers can be rare, but through networking to find a supplier, this task can be made easier. This is true domestically, but even more so when dealing with international suppliers. Counting on a recommendation means sacrificing a level of control that now means if a problem occurs, it can be harder to address. Getting it right first time is essential to success.
Travelling to Asia would be the most worthwhile method of finding a suitable supplier. Entrepreneurs and small companies struggle to justify the costs. Large costs involved and time constraints compound the issues. Mitigating the risk of dealing with an unreliable supplier should be prioritized. Networking addresses both the cost and time constraints. A recommended supplier may come pre-vetted. The referral should also entail an honest review.
Due diligence should follow any received referrals. Every company has different needs. A supplier good suitable for one company may be a terrible fit for your own. Networking is greatly beneficial in creating that immediate shortlist. However, within that shortlist you still need to properly carry out checks prior to making an order.
Such services are not free. The initial cost can be quite high, especially from the perspective of entrepreneurs just starting out. However, cost savings are made through efficiency and by reducing the level of risk you are exposed too. Short term investments can pay dividends for years to come. A reliable supplier can act as a crucial component to your business.
Networking to Find a Supplier
When it comes to finding your international supplier you may want to approach the task on a more domestic scale. The power of networking runs throughout business worldwide. Chances are, through utilising the networks you currently possess you can find a recommended supplier. Direct competitors would be unlikely to help. Business workshops and networking events will point towards the right direction.Travelling to Asia would be the most worthwhile method of finding a suitable supplier. Entrepreneurs and small companies struggle to justify the costs. Large costs involved and time constraints compound the issues. Mitigating the risk of dealing with an unreliable supplier should be prioritized. Networking addresses both the cost and time constraints. A recommended supplier may come pre-vetted. The referral should also entail an honest review.
Due diligence should follow any received referrals. Every company has different needs. A supplier good suitable for one company may be a terrible fit for your own. Networking is greatly beneficial in creating that immediate shortlist. However, within that shortlist you still need to properly carry out checks prior to making an order.
Cost Effective Alternative
Companies have also greatly benefited from hiring the services of sourcing companies. These exist to link suppliers and companies together and form business relationships. Generally, they take on the majority of the risk. From payment terms, negotiating, quality checks and due diligence, sourcing companies can offer an efficient way of finding suppliers for you. Effectively through utilizing their own supplier network, they can find the perfect supplier for you.Such services are not free. The initial cost can be quite high, especially from the perspective of entrepreneurs just starting out. However, cost savings are made through efficiency and by reducing the level of risk you are exposed too. Short term investments can pay dividends for years to come. A reliable supplier can act as a crucial component to your business.
Conclusion
The cheapest option is to always do it yourself. Despite the task taking a large amount of time, you can find the perfect supplier that suits your needs. Others prefer to hire professional help to ensure the journey goes smoothly. Companies prefer to stick to their strengths, which may be in marketing or sales. Remember to always carry out sufficient due diligence if you prefer to source your own supplier. Hiring professional help is a wise move, but for firms on an extremely tight budget, this initial outlay may not be possible.Business in China
Respect
Respect is a fundamental building block of business. When conducting business in China, this truth stretches even further.Underpinning the business world is a concept termed "Face". Summarised, Face is effectively a level of reputation. It can increase and decrease, and is a measure of how others view you. Through actions such as a manager dressing down an employee one would lose Face. On the other hand, if a manager praises a worker’s efforts they would then gain Face.This concept is deeply rooted into Chinese culture. As a foreigner, you may be given a little be more leeway when it comes to following local customs. However, you will still be expected to follow them, and if you do not follow the concept of Face your business trip may be ruined. The power of face has the ability to fracture business relationships, make negotiations go sour, as well as close previously open doors.
Remember, when in another country, you should be polite by following the differing culture.
Negotiations for Business in China
The act of negotiating and reaching the conclusion of a business agreement is no quick task. In China especially so. Forming relationships is key to getting your foot in. The end goal is usually the main concern for Western companies, whereas in China the overall journey is more important. Guanxi is another concept similar to Face which is important. Effectively, the term refers to personal connections and relationships. It is about who you know, not necessarily what you know. Chinese companies prefer to deal with familiar parties. To be able to set up a meeting and negotiations to proceed, Guanxi comes into play. You may need a referral or an introduction to a client before they will consider you as a business partner.Protection
Due diligence is important. More so in China than you may expect. Ensure you take the time to receive appropriate legal advice from a representative familiar with Chinese business laws. Extended this to protecting your intellectual property as well. Protect your IPR when dealing with unknown parties. IPR infringement is uncommon, but does exist. Regardless take suitable precautions. Registering your IPR within China is a great start. Before entering into any business contracts seek professional legal advice.Experience
Venturing into the unknown can be exciting and scary. Experience can make anyone feel at ease. Having a professional firm to guide you along is generally worth the price. Not only do you learn quicker, you also receive the advice of industry experts familiar with the market.Conclusion
Across the course of this article we have touched on a few important tips to keep in mind. Business in China is different than the West. Business trips to China would require carefully preparation. The aspects touched upon within this article are detailed more in depth on our Trade Wiki. If you are planning on travelling to China or simply interested you will find plenty of help and advice there.Emerging Industries: Hold The Key To China's Economy
China's economy is thriving. Growth has slowed, yet growth rates are still higher than the majority of Western nations. The large population enables China to create powerful economic output. Manufacturing, agriculture and services have traditionally been major industries driving China's economy. However, the transitioning economic environment is seeing a shift towards a heavier service reliant than present.
The traditional industries will not go away, but they will need to adapt. Manufacturing is losing focus on low cost goods to more specialised ones. Services are starting to become a more key area, and agriculture still employs over 300 million workers. These core areas will continue to be vital to China’s economy, but embracing new emerging industries will be key to propelling further growth.
Energy is another vital sector that should see further growth across China. The ability of the country should not be understated. Recent news emerged announcing a partnership between the French and Chinese to finance a British power plant. The Chinese investment is in the form through CGN, an already established major player in the domestic market. Clean energy is creating new opportunities. Air pollution is a major problem in certain cities such as Beijing. Reducing pollution and improving air quality should become a target for the government, and many companies may look to benefit.
Over the course of the last few years, education has become a crucial government priority. A transitioning economy includes a skilled workforce. Education will be fundamental in delivering this transition as smoothly as possible. Private universities are emerging, creating an option for companies to invest in their employees directly. The government has also committed to providing $250billion to the sector every year.
The ageing population has become a problem for China. Resulting in the healthcare industry becoming an interesting market. Healthcare will receive an investment of 7% of the nation’s GDP by the government. The available funds will go towards constructing urban hospitals and rural health centres. Private healthcare should also see a boom of sorts. A multi-billion-pound industry exists in private healthcare within the UK despite a tax funded NHS being freely accessible by all citizens. Though in China, healthcare isn’t completely free, creating a much greater opportunity for private companies to profit.
The traditional industries will not go away, but they will need to adapt. Manufacturing is losing focus on low cost goods to more specialised ones. Services are starting to become a more key area, and agriculture still employs over 300 million workers. These core areas will continue to be vital to China’s economy, but embracing new emerging industries will be key to propelling further growth.
Emerging Industries Fueling China's Economy
Attention has started to focus on industries that utilize knowledge, innovation, technology and intricate design. Currently one industry that holds great potential is aerospace engineering. Presently, only a fraction of China’s manufacturing output comes from aerospace. Though the government has identified aerospace as a high priority, hoping to make it a global player.Energy is another vital sector that should see further growth across China. The ability of the country should not be understated. Recent news emerged announcing a partnership between the French and Chinese to finance a British power plant. The Chinese investment is in the form through CGN, an already established major player in the domestic market. Clean energy is creating new opportunities. Air pollution is a major problem in certain cities such as Beijing. Reducing pollution and improving air quality should become a target for the government, and many companies may look to benefit.
Over the course of the last few years, education has become a crucial government priority. A transitioning economy includes a skilled workforce. Education will be fundamental in delivering this transition as smoothly as possible. Private universities are emerging, creating an option for companies to invest in their employees directly. The government has also committed to providing $250billion to the sector every year.
The ageing population has become a problem for China. Resulting in the healthcare industry becoming an interesting market. Healthcare will receive an investment of 7% of the nation’s GDP by the government. The available funds will go towards constructing urban hospitals and rural health centres. Private healthcare should also see a boom of sorts. A multi-billion-pound industry exists in private healthcare within the UK despite a tax funded NHS being freely accessible by all citizens. Though in China, healthcare isn’t completely free, creating a much greater opportunity for private companies to profit.
Conclusion
Only a few emerging industries were covered in this article, but many more exist. Snippets were highlighted to display the sheer diversity where potential waits. Select industries such as healthcare are already well-established, but future trends are expected to fuel even further growth. With China’s economy in the midst of a transitioning period, the uncertainty is creating plenty of excitement for new innovative industries to emerge.Chemicals that are Banned Worldwide
The chemical industry is a business of utilizing raw materials into products needed in our modern world. With the use of basic ingredients, one can produce a surplus amount of products to be made into components for almost every consumer and industrial product. According to the American Chemical Society (1998), the industry's more than 70,000 different registered chemical products are developed, manufactured, and marketed by more than 9,000 companies.
Chemical Production involves processes such as action, distillation, absorption, filtration, extraction, drying, and many more of these raw materials. But, as with any business trade, there are rules and regulations to be followed. Some chemicals are harmless to the biotic system but some are hazardous due to their unique properties. That is why the Stockholm Convention Treaty was formed. It is an international environmental treaty, signed last 2001, that aims to eliminate or restrict production and use of POPs or Persistent organic pollutants. Other organization would include PIC: The Rotterdam Convention on the Prior Information Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade , PAN 12: Pesticide Action Network’s “dirty dozen” list (currently 18 pesticides), WHO 1a and 1b: World Health Organization Acute toxicity classification Ia and Ib, EU: Banned or severely restricted in the European Union according to PAN List of Lists, and US: Banned or severely restricted pesticide EPA according to PAN List of Lists.
In the Fairtrade Prohibited Materials List, they have 2 lists which would include the Amber list and the Red list. The Red List includes materials that must not be used by producers while handling Fairtrade products whilst the Amber list includes, materials which are being evaluated by Fairtrade International as candidates to be prohibited by inclusion into the Red List.
Find the detailed lists here.
That concludes that list of chemicals that are banned by each of the 6 reference lists of include PIC: The Rotterdam Convention on the Prior Information Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade , PAN 12: Pesticide Action Network’s “dirty dozen” list (currently 18 pesticides), WHO 1a and 1b: World Health Organization Acute toxicity classification Ia and Ib, EU: Banned or severely restricted in the European Union according to PAN List of Lists, and the US.
Chemical Production involves processes such as action, distillation, absorption, filtration, extraction, drying, and many more of these raw materials. But, as with any business trade, there are rules and regulations to be followed. Some chemicals are harmless to the biotic system but some are hazardous due to their unique properties. That is why the Stockholm Convention Treaty was formed. It is an international environmental treaty, signed last 2001, that aims to eliminate or restrict production and use of POPs or Persistent organic pollutants. Other organization would include PIC: The Rotterdam Convention on the Prior Information Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade , PAN 12: Pesticide Action Network’s “dirty dozen” list (currently 18 pesticides), WHO 1a and 1b: World Health Organization Acute toxicity classification Ia and Ib, EU: Banned or severely restricted in the European Union according to PAN List of Lists, and US: Banned or severely restricted pesticide EPA according to PAN List of Lists.
In the Fairtrade Prohibited Materials List, they have 2 lists which would include the Amber list and the Red list. The Red List includes materials that must not be used by producers while handling Fairtrade products whilst the Amber list includes, materials which are being evaluated by Fairtrade International as candidates to be prohibited by inclusion into the Red List.
Find the detailed lists here.
That concludes that list of chemicals that are banned by each of the 6 reference lists of include PIC: The Rotterdam Convention on the Prior Information Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade , PAN 12: Pesticide Action Network’s “dirty dozen” list (currently 18 pesticides), WHO 1a and 1b: World Health Organization Acute toxicity classification Ia and Ib, EU: Banned or severely restricted in the European Union according to PAN List of Lists, and the US.
Safety Testing Regulation Standards on Industrial Chemicals
Today, the chemical trade has dramatically increased due to demands of the different chemicals. It is one of the largest and most diverse markets, with different corporations producing chemicals to consumers and other industries. Companies such as BASF, Dow Chemical, Sinopec, and many more are just one of the chemical traders in the business. But, this business requires extra precaution due to the potential risk posed by hazardous chemicals. The lack of adequate infrastructure, guidelines, and safety can make them vulnerable.
The OCED Guidelines is an international standard used for safety testing and assessment of chemicals from industrial chemicals to personal body care products. They are regularly updated with the help of experts of OECD members from all over the world. These Guidelines are divided to 5 sections.
Section 1, would include the physical and chemical properties where different tests are conducted.
The OCED Guidelines is an international standard used for safety testing and assessment of chemicals from industrial chemicals to personal body care products. They are regularly updated with the help of experts of OECD members from all over the world. These Guidelines are divided to 5 sections.
Section 1, would include the physical and chemical properties where different tests are conducted.
- Determination of pH, acidity, and alkalinity
- Density of liquids and solids
- Viscosity of Liquids
- Partition coefficient (slow-stirring method)
- Vapour pressure
- Hydrolysis as function of pH
- HPLC method
- Estimation of Adsorption coefficient
- Adsorption- desorption using Batch equilibrium method
- Potamopyrgus antipodarum Reproduction Test
- Lymnaea stagnalis Reproduction Test
- Enchytraeid Reproduction Test
- Earthworm Reproduction Test (Eisenia fetida/Eisenia andrei)
- Avian Acute Oral Toxicity Test
- Predatory mite (Hypoaspis (Geolaelaps) aculeifer) reproduction test in soil
- Determination of Developmental Toxicity to Dipteran Dung Flies(Scathophaga stercoraria L. (Scathophagidae), Musca autumnalis De Geer (Muscidae))
- Collembolan Reproduction Test in Soil
- Medaka Extended One Generation Reproduction Test (MEOGRT)
- The Larval Amphibian Growth and Development Assay (LAGDA)
- Predatory mite (Hypoaspis (Geolaelaps) aculeifer) reproduction test in soil
- Ready Biodegradability - CO2 in sealed vessels (Headspace Test)
- Bioaccumulation in Fish: Aqueous and Dietary Exposure
- Bioaccumulation in Terrestrial Oligochaetes
- Inherent Biodegradability: Modified MITI Test (II)
- Simulation Tests to Assess the Biodegradability of Chemicals Discharged in Wastewater
- Bioaccumulation in Sediment-dwelling Benthic Oligochaetes
- Phototransformation of Chemicals in Water – Direct Photolysis
- Estimation of Emissions from Preservative - Treated Wood to the Environment
- Ready Biodegradability - CO2 in sealed vessels (Headspace Test)
- Anaerobic Biodegradability of Organic Compounds in Digested Sludge: by Measurement of Gas Production
- Performance-Based Test Guideline for Stably Transfected Transactivation In Vitro Assays to Detect Estrogen Receptor Agonists and Antagonists
- In Vitro Skin Sensitisation
- Stably Transfected Human Androgen Receptor Transcriptional Activation Assay for Detection of Androgenic Agonist and Antagonist Activity of Chemicals
- Reproduction/Developmental Toxicity Screening Test
- Combined Repeated Dose Toxicity Study with the Reproduction/Developmental Toxicity Screening Test
- In vitro skin corrosion: reconstructed human epidermis (RHE) test method
- In Vitro Mammalian Chromosomal Aberration Test
- Mammalian Erythrocyte Micronucleus Test
- Mammalian Bone Marrow Chromosomal Aberration Test
- In Vitro Mammalian Cell Gene Mutation Tests using the Hprt and xprt genes
- Introduction to OECD Test Guidelines on Pesticide Residues Chemistry - Section 5 Part A
- Crop Field Trial
- Magnitude of the Pesticide Residues in Processed Commodities
- Stability of Pesticide Residues in Stored Commodities
- Nature of the Pesticide Residues in Processed Commodities - High Temperature Hydrolysis
- Residues in Rotational Crops (Limited Field Studies)
- Introduction to Other Test Guidelines
- Metabolism in Crops
- Metabolism in Rotational Crops
- Metabolism in Livestock
How to Approach Contract Negotiation Process like a Professional?
We are exposed to different industries such as manufacturing, retail, and even marketing as a sourcing company. We completely understand how competitive these industries are and it is a must for us to adjust to the competition. You cannot simply stick to the basics to be competitive in any business environment. In this blog post, we will further take a closer look at one of the more complex processes we will divulge which is: production line assessment.
This process is much like supplier assessment except this time around we dig deeper into the supplier or manufacturer’s system/processes, operating procedures, and production standards. We would not really intervene to how they do the following, but we only want to make sure these factors are in line with the company standards and our own expectations from them.
Production line assessment is used to make the following products: Garments, Plastics, Electronics, and Branded/Logo Items.
As a globally competitive sourcing company, we want our manufacturers and suppliers to follow an optimized production process for their production. In the world of manufacturing, this term is known as “Lean Operations” which is one of the components of the Lean Manufacturing operation system. Most production processes are underutilized and could follow rudimentary methods, which is why it is important for us to assess them from time to time. Helping them achieve an optimized production process will not only help our company but will also benefit them to improve their services.
We want to ensure good quality (or at least reach client standards) of our manufactured goods. The best way to achieve this is to assist our suppliers and manufacturers in their production line process and make sure it is optimized for better efficiency and maximum productivity. There is no need to spend resources in this process, you only must set standards for the manufacturers and suppliers to comply. The manufacturing production line is not your work as a sourcing company, but it is your responsibility to assess the system is up to the company’s standards.
For more details specifically about what this service is; click here: Further reading on Production Line Assessment
Click here if you want to do production line assessment on White Label products.
Click here if you want to do production line assessment on Apparel.
Click here if you want to do production line assessment on Electronics.
Click here if you want to do production line assessment on Plastics.
This process is much like supplier assessment except this time around we dig deeper into the supplier or manufacturer’s system/processes, operating procedures, and production standards. We would not really intervene to how they do the following, but we only want to make sure these factors are in line with the company standards and our own expectations from them.
Production line assessment is used to make the following products: Garments, Plastics, Electronics, and Branded/Logo Items.
What is a Production Line?
A production line is the process flow of manufacturing a product. It starts with the materials and components of the product, the creation process and up to the end of the line when the final product is materialized. The manufacturing production line can easily be described through words but the actual process including the micro-processes involved can really be tedious. However, you really must go through production line assessment if you want to significantly decrease costs and achieve the best quality.As a globally competitive sourcing company, we want our manufacturers and suppliers to follow an optimized production process for their production. In the world of manufacturing, this term is known as “Lean Operations” which is one of the components of the Lean Manufacturing operation system. Most production processes are underutilized and could follow rudimentary methods, which is why it is important for us to assess them from time to time. Helping them achieve an optimized production process will not only help our company but will also benefit them to improve their services.
We want to ensure good quality (or at least reach client standards) of our manufactured goods. The best way to achieve this is to assist our suppliers and manufacturers in their production line process and make sure it is optimized for better efficiency and maximum productivity. There is no need to spend resources in this process, you only must set standards for the manufacturers and suppliers to comply. The manufacturing production line is not your work as a sourcing company, but it is your responsibility to assess the system is up to the company’s standards.
For more details specifically about what this service is; click here: Further reading on Production Line Assessment
Click here if you want to do production line assessment on White Label products.
Click here if you want to do production line assessment on Apparel.
Click here if you want to do production line assessment on Electronics.
Click here if you want to do production line assessment on Plastics.
Proven and Tested Production Line Measures You Need to Know
We are exposed to different industries such as manufacturing, retail, and even marketing as a sourcing company. We completely understand how competitive these industries are and it is a must for us to adjust to the competition. You cannot simply stick to the basics to be competitive in any business environment. In this blog post, we will further take a closer look at one of the more complex processes we will divulge which is: production line assessment.
This process is much like supplier assessment except this time around we dig deeper into the supplier or manufacturer’s system/processes, operating procedures, and production standards. We would not really intervene to how they do the following, but we only want to make sure these factors are in line with the company standards and our own expectations from them.
Production line assessment is used to make the following products: Garments, Plastics, Electronics, and Branded/Logo Items.
As a globally competitive sourcing company, we want our manufacturers and suppliers to follow an optimized production process for their production. In the world of manufacturing, this term is known as “Lean Operations” which is one of the components of the Lean Manufacturing operation system. Most production processes are underutilized and could follow rudimentary methods, which is why it is important for us to assess them from time to time. Helping them achieve an optimized production process will not only help our company but will also benefit them to improve their services.
We want to ensure good quality (or at least reach client standards) of our manufactured goods. The best way to achieve this is to assist our suppliers and manufacturers in their production line process and make sure it is optimized for better efficiency and maximum productivity. There is no need to spend resources in this process, you only must set standards for the manufacturers and suppliers to comply. The manufacturing production line is not your work as a sourcing company, but it is your responsibility to assess the system is up to the company’s standards.
For more details specifically about what this service is; click here: Further reading on Production Line Assessment
Click here if you want to do production line assessment on White Label products.
Click here if you want to do production line assessment on Apparel.
Click here if you want to do production line assessment on Electronics.
Click here if you want to do production line assessment on Plastics.
This process is much like supplier assessment except this time around we dig deeper into the supplier or manufacturer’s system/processes, operating procedures, and production standards. We would not really intervene to how they do the following, but we only want to make sure these factors are in line with the company standards and our own expectations from them.
Production line assessment is used to make the following products: Garments, Plastics, Electronics, and Branded/Logo Items.
What is a Production Line?
A production line is the process flow of manufacturing a product. It starts with the materials and components of the product, the creation process and up to the end of the line when the final product is materialized. The manufacturing production line can easily be described through words but the actual process including the micro-processes involved can really be tedious. However, you really must go through production line assessment if you want to significantly decrease costs and achieve the best quality.As a globally competitive sourcing company, we want our manufacturers and suppliers to follow an optimized production process for their production. In the world of manufacturing, this term is known as “Lean Operations” which is one of the components of the Lean Manufacturing operation system. Most production processes are underutilized and could follow rudimentary methods, which is why it is important for us to assess them from time to time. Helping them achieve an optimized production process will not only help our company but will also benefit them to improve their services.
We want to ensure good quality (or at least reach client standards) of our manufactured goods. The best way to achieve this is to assist our suppliers and manufacturers in their production line process and make sure it is optimized for better efficiency and maximum productivity. There is no need to spend resources in this process, you only must set standards for the manufacturers and suppliers to comply. The manufacturing production line is not your work as a sourcing company, but it is your responsibility to assess the system is up to the company’s standards.
For more details specifically about what this service is; click here: Further reading on Production Line Assessment
Click here if you want to do production line assessment on White Label products.
Click here if you want to do production line assessment on Apparel.
Click here if you want to do production line assessment on Electronics.
Click here if you want to do production line assessment on Plastics.
The Fundamentals of a Proven Product Costing System
As we have previously discussed, our company assists suppliers through production line assessment to ensure quality in manufacturing products and this goes the same way when it comes to setting a product costing system. We make sure products are priced the right way which is why we have established a product costing system in this company.
Product costing is used to make the following products: Garments, Plastics, Electronics, and Branded/Logo Items.
For more details specifically about what this service is; click here: Further reading on Cost Estimation.
Click here if you want to set a product costing system for White Label products.
Click here if you want to set a product costing system for Apparel.
Click here if you want to set a product costing system for Electronics.
Click here if you want to set a product costing system for Plastics.
Product costing is used to make the following products: Garments, Plastics, Electronics, and Branded/Logo Items.
Components of a Product Costing System
This product costing system component must be basic when it comes to calculating product costs since material expenses are where most of the capital goes in terms of production. Material costs also include freight expenses, storage fees, import duties and other expenses directly attributable to material acquisition.Labor Expenses
Factory Overhead
Taxes, Duties, and Fees
Calculating Product Costs
Companies follow different formulas for establishing a product costing system. Here in our company, we follow the standard product costing system in the industry which is to divide the total production cost to the number of units produced. The quotient is the production cost per unit and should be the basis for the actual sales price of the product upon considering other factors such as competition, availability and a lot more. Any amount applied beyond the production cost per unit is already considered as your potential profit and values below the production cost per unit are the loss to the company. This process is how our product costing and pricing is established.For more details specifically about what this service is; click here: Further reading on Cost Estimation.
Click here if you want to set a product costing system for White Label products.
Click here if you want to set a product costing system for Apparel.
Click here if you want to set a product costing system for Electronics.
Click here if you want to set a product costing system for Plastics.
The Secrets to Product Packaging Solutions Here in China
In the world of manufacturing and retail, product packaging is not simply a process we do but it’s more of an art. In fact, product packaging services have become an industry on its own as there is an increasing number of companies who are exclusively into packaging without manufacturing any products or able to render other services. Packaging not only contain and protect the product from transportation hassles, but it is also very instrumental aesthetics-wise. Always keep in mind, product packaging is the first thing customers see and not the actual product. In fact, product packaging design could be the key factor which will set you apart from the rest of your competitors.
Packaging is used to make the following products: Garments, Plastics, Electronics, and Branded/Logo Items.
For more details specifically about what this service is; click here: Further reading on Cost Estimation.
Click here if you want to do product packaging for White Label products.
Click here if you want to do product packaging for Apparel.
Click here if you want to do product packaging for Electronics.
Click here if you want to doproduct packaging for Plastics.
Packaging is used to make the following products: Garments, Plastics, Electronics, and Branded/Logo Items.
Factors to Consider in Product Packaging
Suppliers should understand your needs.
Going for a low price without compensating quality.
Professionalism on both ends.
Hold your packaging company accountable.
Always go for samples.
For more details specifically about what this service is; click here: Further reading on Cost Estimation.
Click here if you want to do product packaging for White Label products.
Click here if you want to do product packaging for Apparel.
Click here if you want to do product packaging for Electronics.
Click here if you want to doproduct packaging for Plastics.
A Simple View on Professional Intermediary Services
Intermediary services are very instrumental to supply chain management and manufacturing businesses. Without these services, there would be no flow in transporting products from manufacturers up to the end users. It would be much more efficient if a third party intervenes in talking to all the suppliers instead of customers communicating with them one by one. They can also be described as “the middleman” but their intermediary services really go beyond than transacting with suppliers and customers.
Intermediary services are needed to make the following products: Garments, Plastics, Electronics, and Branded/Logo Items.
For more details specifically about what this service is; click here: Further reading on Intermediary Services.
Click here for intermediary services on White Label products.
Click here for intermediary services on Apparel.
Click here for intermediary services on Electronics.
Click here for intermediary services on Plastics.
Intermediary services are needed to make the following products: Garments, Plastics, Electronics, and Branded/Logo Items.
Different Types of Intermediary Services
Intermediary services as agents/brokers
Intermediary services as wholesalers
Intermediary services as distributors
Intermediary services as retailers
Biggest Advantage of Intermediary Services
In our sourcing and intermediary company, we perform different types of qualified intermediary except for being a retailer. Our qualified intermediary may also include but are not limited to doing paper works, checking legalities, handling customs and a lot more. The biggest catch why our clients choose to go with our intermediary services is because they are able to save money through our help. We have better-negotiating power in dealing with suppliers since we are more connected to them compared to the relationship between customer and manufacturers. We can easily coordinate with suppliers/manufacturers and provide immediate payment methods which most clients do not have. To sum it all up, we make transactions flow smoothly and everything becomes more convenient for each party involved.For more details specifically about what this service is; click here: Further reading on Intermediary Services.
Click here for intermediary services on White Label products.
Click here for intermediary services on Apparel.
Click here for intermediary services on Electronics.
Click here for intermediary services on Plastics.
How to Provide Quality Demand Planning and Forecasting?
Business decisions always come with a lot of risks. There is never an assurance where decisions CEOs make for their respective companies will translate to success. However, there’s demand planning and forecasting which can help foretell the chances of success out of business decisions you make for your company. Demand planning and forecasting is a vital process anticipating the demand for a product or service based on uncontrolled variables such as competition. Product demand forecasting is always targeted towards future time periods such as next month, within a year or for the next ten years.
Demand forecasting is needed to make the following products: Garments, Plastics, Electronics, and Branded/Logo Items.
In our company, we provide demand planning and forecasting services for our clients in support of the products they launch and continue to manufacture. We make sure the objectives are modified according to the outcome of our demand planning and forecasting. For example, if our client is planning to manufacture 100,000 units of their latest product but the forecast suggests demand is low for the product. We will ask our client to modify the numbers and only manufacture 30,000 to 50,000 units to avoid potential loss. This is the part where the marketing department will do their magic and promote the product to further increase the demand later.
As you can see, demand planning and forecasting do not only impact the manufacturing process but also play a huge role to cost estimation and other financial aspects of an organization. The demand process can also be a factor in employment and workforce within the company. If the demand forecast suggests a very high number, then the company should automatically adjust and makes sure they can comply with the demand and they have enough employees for the huge workload for their upcoming product. They do not really have to hire additional employees full-time but on a project basis only for this high demand product.
Demand forecasting is needed to make the following products: Garments, Plastics, Electronics, and Branded/Logo Items.
The Effect of Demand Planning and Forecasting
A lot of businesses hugely rely on demand planning and forecasting for their operations. They look at all these forecasting reports to lessen the risks they take out of their decisions. There are also demand forecasting tools such as statistics, software, and apps they can use for a more accurate demand planning and forecasting. There are even some companies who assemble teams who work exclusively on this particular task aside from their regular employees.In our company, we provide demand planning and forecasting services for our clients in support of the products they launch and continue to manufacture. We make sure the objectives are modified according to the outcome of our demand planning and forecasting. For example, if our client is planning to manufacture 100,000 units of their latest product but the forecast suggests demand is low for the product. We will ask our client to modify the numbers and only manufacture 30,000 to 50,000 units to avoid potential loss. This is the part where the marketing department will do their magic and promote the product to further increase the demand later.
As you can see, demand planning and forecasting do not only impact the manufacturing process but also play a huge role to cost estimation and other financial aspects of an organization. The demand process can also be a factor in employment and workforce within the company. If the demand forecast suggests a very high number, then the company should automatically adjust and makes sure they can comply with the demand and they have enough employees for the huge workload for their upcoming product. They do not really have to hire additional employees full-time but on a project basis only for this high demand product.
What is Outstanding Logistics Management in the Manufacturing World?
Logistics is such a big word in the world of manufacturing and supply chain management. The word refers to all the activities being done by a company in this industry as part of their operations which include procurement, feasibility studies, inventory management, maintenance, logistics management and a lot more. The main goal of logistics management is to make sure everything is done right from the top of the operations all the way down to its customers at the right place, time and conditions. It is understandable that errors and problems could be encountered in any operations but with integrated logistics in place, these issues can be avoided and there are always contingency or fallback plans when worse comes to worst.
Logistics is necessary to make the following products: Garments, Plastics, Electronics, and Branded/Logo Items.
Better efficiency and reduced costs are the results of excellent logistics management along with understanding the process on a system theory level. Keep in mind that this process requires strategic planning and you cannot just dive into the process without knowing the things you want to achieve or improve. Our logistics services are top notch in this industry and we do not only settle for what’s traditional as we continually look for improvements and work on other aspects of logistics management that we need to learn of.
For more details specifically about what this service is; click here: Further reading on Logistics.
Click here if you want to do logistics management on White Label products.
Click here if you want to do logistics management on Apparel.
Click here if you want to do logistics management on Electronics.
Click here if you want to do logistics management on Plastics.
Logistics is necessary to make the following products: Garments, Plastics, Electronics, and Branded/Logo Items.
Advantages of Logistics Management
Logistics management has always been a critical part of supply management and manufacturing companies’ concerns. They know and understand how supply chain logistics help them meet or even exceed customer expectations. As a competent sourcing company, we help our client do logistics management so that they can fully enjoy the advantages of such process. Logistics management can have a huge impact on your business and here are a few advantages you need to know of.Reduced overhead costs
Faster delivery time
Better efficiency and reduced costs are the results of excellent logistics management along with understanding the process on a system theory level. Keep in mind that this process requires strategic planning and you cannot just dive into the process without knowing the things you want to achieve or improve. Our logistics services are top notch in this industry and we do not only settle for what’s traditional as we continually look for improvements and work on other aspects of logistics management that we need to learn of.
For more details specifically about what this service is; click here: Further reading on Logistics.
Click here if you want to do logistics management on White Label products.
Click here if you want to do logistics management on Apparel.
Click here if you want to do logistics management on Electronics.
Click here if you want to do logistics management on Plastics.
Monday, 29 October 2018
Whats your Vietnam Strategy
Originally from: https://intrepidsourcing.com/whats-your-vietnam-strategy/
Vietnam’s anti-China riots this past May have helped American businesses in big ways. Vietnam is a member of ASEAN and will be a member of the Trans-Pacific Partnership instead of China (both America friendly trade blocs). In addition, Vietnam wants American investment, the government has made clear that it values the Americans here and wants their businesses to stay.
As many foreign businesses try to reduce costs or over-dependence on Chinese manufacturers, they will look to go abroad—Vietnam in particular. Vietnam provides low wages and high quality manufacturing—two of which China is currently lacking.
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Vietnam’s anti-China riots this past May have helped American businesses in big ways. Vietnam is a member of ASEAN and will be a member of the Trans-Pacific Partnership instead of China (both America friendly trade blocs). In addition, Vietnam wants American investment, the government has made clear that it values the Americans here and wants their businesses to stay.
As many foreign businesses try to reduce costs or over-dependence on Chinese manufacturers, they will look to go abroad—Vietnam in particular. Vietnam provides low wages and high quality manufacturing—two of which China is currently lacking.
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China’s Banks Press PBOC to Cut Reserve-Requirement Ratio
Originally from: https://intrepidsourcing.com/chinas-banks-press-pboc-to-cut-reserve-requirement-ratio/
China’s big banks are currently pressing the PBOC to cut reserve-requirement ratio based on increasing pressure for high profitability. The discussion between the big banks and the central bank demonstrates that Beijing faces weakening economy with slowing growth. Therefore, cutting reserve-requirement ratio is unavoidable due to the fact that the deposit reserve rate is one of the methods to control inflation in China. Lianping, a chief economist, suggested that “the PBOC should reduce the ratio to an “appropriate” level to help banks and support the economy.” However, cutting reserve-requirement ratio might have a negative influence on the financial stability when the stock market becomes better.
China’s big banks are currently pressing the PBOC to cut reserve-requirement ratio based on increasing pressure for high profitability. The discussion between the big banks and the central bank demonstrates that Beijing faces weakening economy with slowing growth. Therefore, cutting reserve-requirement ratio is unavoidable due to the fact that the deposit reserve rate is one of the methods to control inflation in China. Lianping, a chief economist, suggested that “the PBOC should reduce the ratio to an “appropriate” level to help banks and support the economy.” However, cutting reserve-requirement ratio might have a negative influence on the financial stability when the stock market becomes better.
Company Law in China: Regulation of Business Organizations in a Socialist Market Economy
Originally from: https://intrepidsourcing.com/company-law-in-china-regulation-of-business-organizations-in-a-socialist-market-economy/
"Company Law in China: Regulation of Business Organizations in a Socialist Market Economy” is becoming increasingly popular among Chinese lawyers. This understandable book provides a comprehensive and important introduction to business law in China and covers the most recent legislative and regulatory developments of Chinese business law. This book covers topics such as shareholder litigation, mergers, acquisitions, among others. Its worth any lawyer's time to read, let alone one working out of China.
"Company Law in China: Regulation of Business Organizations in a Socialist Market Economy” is becoming increasingly popular among Chinese lawyers. This understandable book provides a comprehensive and important introduction to business law in China and covers the most recent legislative and regulatory developments of Chinese business law. This book covers topics such as shareholder litigation, mergers, acquisitions, among others. Its worth any lawyer's time to read, let alone one working out of China.
RMB getting stronger against USD
Originally from: https://intrepidsourcing.com/rmb-getting-stronger-against-usd/
Based on the China Foreign Exchange Trading System, the value of the RMB has been strengthened by 42 basis points to 6.1153 against the U.S. dollar in its central parity rate on Thursday. In China's spot foreign exchange market, the RMB is allowed to fluctuate 2 % from the central parity rate each trading day. The central parity rate of the RMB against the USD is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.
Based on the China Foreign Exchange Trading System, the value of the RMB has been strengthened by 42 basis points to 6.1153 against the U.S. dollar in its central parity rate on Thursday. In China's spot foreign exchange market, the RMB is allowed to fluctuate 2 % from the central parity rate each trading day. The central parity rate of the RMB against the USD is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.
The Classic China Scam: Done Often Because It Works
Originally from: https://intrepidsourcing.com/the-classic-china-scam-done-often-because-it-works/
The scam goes as follows: a project leader wants to build a business relationship with you. Typically, you meet the project leader in a high-end hotel where you will review the contract and the site plans. Afterward, you will be asked to prepare an exorbitant gift for whomever.
The most important part is they will ask you to provide your banking information to wire the first 20% of the project expenses due prior to starting the work. After the money is received, they disappear. Therefore, American and European service companies should always do basic due diligence on potential partners before entering China in order to avoid any potential risks. The classic China scam has been done repeatedly because many trusting people will follow a Chinese project leader without doing any due diligence.
The scam goes as follows: a project leader wants to build a business relationship with you. Typically, you meet the project leader in a high-end hotel where you will review the contract and the site plans. Afterward, you will be asked to prepare an exorbitant gift for whomever.
The most important part is they will ask you to provide your banking information to wire the first 20% of the project expenses due prior to starting the work. After the money is received, they disappear. Therefore, American and European service companies should always do basic due diligence on potential partners before entering China in order to avoid any potential risks. The classic China scam has been done repeatedly because many trusting people will follow a Chinese project leader without doing any due diligence.
Japan export growth slows and so does its economy
Originally from: https://intrepidsourcing.com/japan-export-growth-slows-and-so-does-its-economy/
Japan's exports grew year on year for the month of November—the third straight month; however, the 4.9 percent rise is lower than 9.6 percent gain in October and represents slowing demand in Asia and Europe dampened trade even as the yen has fallen. Even as Japanes exports to Asia and Europe have remained weak shipments to America remain firm as the U.S. economy continues to help spur output in Asia and Japan.
Japan's exports grew year on year for the month of November—the third straight month; however, the 4.9 percent rise is lower than 9.6 percent gain in October and represents slowing demand in Asia and Europe dampened trade even as the yen has fallen. Even as Japanes exports to Asia and Europe have remained weak shipments to America remain firm as the U.S. economy continues to help spur output in Asia and Japan.
U.S. slaps huge duties on solar goods from China
Originally from: https://intrepidsourcing.com/u-s-slaps-huge-duties-on-solar-goods-from-china/
On Tuesday, the United States confirmed steep import duties on solar products from China and Taiwan in a decision that could inflame trade tensions between the two countries. The US decision will affect all companies including China's Trina Solar Ltd and Suntech Power and Taiwan's Motech Industries Inc, which means Chinese producers face anti-dumping duties as high as 27.55 %. China's Commerce Ministry expressed "serious concern" on Wednesday and vowed to protect its interests in the WTO framework and the U.S. judicial system.
On Tuesday, the United States confirmed steep import duties on solar products from China and Taiwan in a decision that could inflame trade tensions between the two countries. The US decision will affect all companies including China's Trina Solar Ltd and Suntech Power and Taiwan's Motech Industries Inc, which means Chinese producers face anti-dumping duties as high as 27.55 %. China's Commerce Ministry expressed "serious concern" on Wednesday and vowed to protect its interests in the WTO framework and the U.S. judicial system.
Hong Kong Banks Shut Down US Accounts Rather Than Deal with FATCA
Originally from: https://intrepidsourcing.com/hong-kong-banks-shut-down-us-accounts-rather-than-deal-with-fatca/
Due to its geographical proximity to the mainland, modern and (until now) friendly banking system and transparent legal regime, Hong Kong has long served as a popular gateway into China for foreign businesses, especially Americans; however, since the Foreign Account Tax Compliance Act (FATCA) came into effect in early July, many Hong Kong based banks have been refusing to open new accounts and shutting down the existing accounts of American individuals and corporations. Therefore, this has left many American businesses stranded; as the existing accounts are shut down, the long-running operations are paralyzed as well. Based on the change of the taxation policy, FATCA may prove to be the final straw.
Due to its geographical proximity to the mainland, modern and (until now) friendly banking system and transparent legal regime, Hong Kong has long served as a popular gateway into China for foreign businesses, especially Americans; however, since the Foreign Account Tax Compliance Act (FATCA) came into effect in early July, many Hong Kong based banks have been refusing to open new accounts and shutting down the existing accounts of American individuals and corporations. Therefore, this has left many American businesses stranded; as the existing accounts are shut down, the long-running operations are paralyzed as well. Based on the change of the taxation policy, FATCA may prove to be the final straw.
The FTAs in Guangdong, Tianjin and Fujian will open in several months
Originally from: https://intrepidsourcing.com/the-ftas-in-guangdong-tianjin-and-fujian-will-open-in-several-months/
On December 12th, 2014, Chinese Premier Li Keqiang held a State Council Executive Meeting where he promoted emulating the FTA experience in Shanghai, improving the negative list and increasing the speed of opening up. As a result, they will stress reform and opening up of the Shanghai free trade zone, especially the service industry and advanced manufacturing. Also, there are 28 reforms investing the investment, trade, finance and service industry will be enacted throughout the country. China will also open 3 more free trade zones in Guangdong, Tianjin and Fujian, taking the experience of the Shanghai free trade zone and adding local characteristics to the new zones.
On December 12th, 2014, Chinese Premier Li Keqiang held a State Council Executive Meeting where he promoted emulating the FTA experience in Shanghai, improving the negative list and increasing the speed of opening up. As a result, they will stress reform and opening up of the Shanghai free trade zone, especially the service industry and advanced manufacturing. Also, there are 28 reforms investing the investment, trade, finance and service industry will be enacted throughout the country. China will also open 3 more free trade zones in Guangdong, Tianjin and Fujian, taking the experience of the Shanghai free trade zone and adding local characteristics to the new zones.
CIETAC Arbitration: Different
Originally from: https://intrepidsourcing.com/cietac-arbitration-different/
An increasing number of Chinese companies require that their contracts with American companies provide for disputes to be resolved via arbitration in China; both sides will use CIETAC arbitration clauses under these circumstances. Many people worry if they can get a fair decision when they have to arbitrate in China, especially foreigners. Moreover, many American companies usually believe “the Chinese way of doing things” is bias due to the fact that some foreign companies are not always treated fairly in China; however, people should clearly understand the difference between the bias and the American misunderstandings of how China operates for everyone.
An increasing number of Chinese companies require that their contracts with American companies provide for disputes to be resolved via arbitration in China; both sides will use CIETAC arbitration clauses under these circumstances. Many people worry if they can get a fair decision when they have to arbitrate in China, especially foreigners. Moreover, many American companies usually believe “the Chinese way of doing things” is bias due to the fact that some foreign companies are not always treated fairly in China; however, people should clearly understand the difference between the bias and the American misunderstandings of how China operates for everyone.
Shanghai State-owned Mobile Platform Will be Opened Soon
Originally from: https://intrepidsourcing.com/shanghai-state-owned-mobile-platform-will-be-opened-soon/
Ma Yonghua, the Secretary General of the Shanghai State-owned Assets Supervision and Administration Commission, said during the Shanghai State-owned Summit Forum, “Shanghai will gradually implement several policies, such as making the SASAC responsible for regulatory capital, Platform Companies being responsible for the basic operation, enterprise and group responsible for the daily management”.
Shanghai International Group and Shanghai Guosheng group have recently finished both vertical integration and horizontal collaboration based on the position and location. This which means the Shanghai State-owned Mobile Platform will be opened soon.
In addition, the function positioning of Shanghai Guosheng group is: developing the state-owned stake, promoting the development of mixed-ownership economy as the main function, becoming the share holders of partial state-owned equities, the operating carrier of value management, the executive channel of capital allocation and the bridge for the combination of industrial and financial capital.
Ma Yonghua, the Secretary General of the Shanghai State-owned Assets Supervision and Administration Commission, said during the Shanghai State-owned Summit Forum, “Shanghai will gradually implement several policies, such as making the SASAC responsible for regulatory capital, Platform Companies being responsible for the basic operation, enterprise and group responsible for the daily management”.
Shanghai International Group and Shanghai Guosheng group have recently finished both vertical integration and horizontal collaboration based on the position and location. This which means the Shanghai State-owned Mobile Platform will be opened soon.
In addition, the function positioning of Shanghai Guosheng group is: developing the state-owned stake, promoting the development of mixed-ownership economy as the main function, becoming the share holders of partial state-owned equities, the operating carrier of value management, the executive channel of capital allocation and the bridge for the combination of industrial and financial capital.
Chinese Art is Increasingly Transparent
Originally from: https://intrepidsourcing.com/chinese-art-is-increasingly-transparent/
China’s art and antiques market is the world’s largest with 2013 sales exceeding US$8.5 billion and has increased in value by 28.8 percent from 2012. The overseas market of Chinese art and antiques in 2013 was US$2.3 billion, representing an even larger increase from the year before of 42 percent.
Transparency into the Chinese art market is growing thanks to professional art news providers such as Artron.net, Hurun, YangGallery.com, among others; however, art auctioneers compete aggressively.
In order to win business, the largest auctioneers might guarantee a minimum bid, and have been known to lose millions when actual bids do not clear the minimum. Moreover, art investors have also been concerned about distinguishing fakes.
China’s art and antiques market is the world’s largest with 2013 sales exceeding US$8.5 billion and has increased in value by 28.8 percent from 2012. The overseas market of Chinese art and antiques in 2013 was US$2.3 billion, representing an even larger increase from the year before of 42 percent.
Transparency into the Chinese art market is growing thanks to professional art news providers such as Artron.net, Hurun, YangGallery.com, among others; however, art auctioneers compete aggressively.
In order to win business, the largest auctioneers might guarantee a minimum bid, and have been known to lose millions when actual bids do not clear the minimum. Moreover, art investors have also been concerned about distinguishing fakes.
China to Southern Europe by Rail: Cheap and Fast
Originally from: https://intrepidsourcing.com/china-to-southern-europe-by-rail-cheap-and-fast/
The Yiwu-Madrid freight route is the seventh rail road connecting China to Europe and runs from Yiwu, through Xinjiang in Northwest China, Kazakhstan, Russia, Belarus, Poland, Germany and France.
Other existing rail routes already connect China to Germany but this new railway includes Spain and France and only takes 21 days; moreover, its cheaper than air and faster than sea.
Presently, the rail is mainly being used for Chinese exports to Europe but will soon be used for exports to China as interest from western producers of pharmaceuticals, chemicals and foods has peaked.
The Yiwu-Madrid freight route is the seventh rail road connecting China to Europe and runs from Yiwu, through Xinjiang in Northwest China, Kazakhstan, Russia, Belarus, Poland, Germany and France.
Other existing rail routes already connect China to Germany but this new railway includes Spain and France and only takes 21 days; moreover, its cheaper than air and faster than sea.
Presently, the rail is mainly being used for Chinese exports to Europe but will soon be used for exports to China as interest from western producers of pharmaceuticals, chemicals and foods has peaked.
Russian Corporations help Ruble
Originally from: https://intrepidsourcing.com/russian-corporations-help-ruble/
In order to stabilize the ruble, the Russian government has asked five companies to cut the size of its foreign currency assets: Gazprom, Rosneft, Zarubezhneft, Alrosa and Kristall.. On December 23, 2014 (local time), the ruble exchange rate raised by nearly 1 percent, appreciating the ruble to USD1 to 55 ruble.
The Central Bank of Russia on December 18th and 19th sold 500 million USD and 420 million USD respectively based on the requirement from the Russian Ministry of Finance under the Federal Treasury; the sovereign credit rating of Russia is BBB- level, changing from "negative" to "negative watch" a precursor to a downgrade.
In order to stabilize the ruble, the Russian government has asked five companies to cut the size of its foreign currency assets: Gazprom, Rosneft, Zarubezhneft, Alrosa and Kristall.. On December 23, 2014 (local time), the ruble exchange rate raised by nearly 1 percent, appreciating the ruble to USD1 to 55 ruble.
The Central Bank of Russia on December 18th and 19th sold 500 million USD and 420 million USD respectively based on the requirement from the Russian Ministry of Finance under the Federal Treasury; the sovereign credit rating of Russia is BBB- level, changing from "negative" to "negative watch" a precursor to a downgrade.
China Funding Nicaraguan Canal
Originally from: https://intrepidsourcing.com/china-funding-nicaraguan-canal/
On December 22, 2014, Chinese businessman, Wang Jing Company, spent 50 billion USD on establishing the Nicaragua canal in Southern Nicaraguan town of Rivas.The first investment of the project is valued near 1 billion RMB.The length of the canal will be 280 km and is expected to provide over 50,000 jobs during the construction period and 200,000 jobs when in operation. Nicaragua is expected to handle nearly 5% of all global ocean shipments.
On December 22, 2014, Chinese businessman, Wang Jing Company, spent 50 billion USD on establishing the Nicaragua canal in Southern Nicaraguan town of Rivas.The first investment of the project is valued near 1 billion RMB.The length of the canal will be 280 km and is expected to provide over 50,000 jobs during the construction period and 200,000 jobs when in operation. Nicaragua is expected to handle nearly 5% of all global ocean shipments.
Production Monitoring is more Important than Pre-Shipment Inspection
Originally from: https://intrepidsourcing.com/production-monitoring-is-more-important-than-pre-shipment-inspection/
When performing a pre-shipment inspection, the non-conformities identified usually oblige the supplier to rework or replace the goods that the buyer cannot accept; however, the buyer should know that he is taking risks by taking such a decision. Three risks exist if people want to repair their goods:
When performing a pre-shipment inspection, the non-conformities identified usually oblige the supplier to rework or replace the goods that the buyer cannot accept; however, the buyer should know that he is taking risks by taking such a decision. Three risks exist if people want to repair their goods:
- Manipulating finished goods can create new defects
- There is usually no guarantee the supplier can improve the defect(s)
- The delivery will certainly be delayed for a few days
- There will be shipment delays of days or weeks
- Some suppliers require financial support
- A long negotiation process which is time-consuming and cost money.
China Tip: Monitoring the Production Process
Originally from: https://intrepidsourcing.com/china-tip-monitoring-the-production-process/
All buyers know keeping a close eye on production is important and that catching problems earlier is far cheaper than later; however, few effectively do. There are two ways to effectively monitory production of your product:
All buyers know keeping a close eye on production is important and that catching problems earlier is far cheaper than later; however, few effectively do. There are two ways to effectively monitory production of your product:
- taking several snapshots along the production cycle by performing 1-day inspections
- looking at the movie as it unfolds by stationing 1 technician in the factory for a certain period.
China and Ireland Extend Trade Ties
Originally from: https://intrepidsourcing.com/china-and-ireland-extend-trade-ties/
2014 saw several trade missions from Ireland to China to expand trade and improve relations, missions that will be mutually beneficial and aid to further develop Ireland’s export market. There was an event organized by Enterprise Ireland which led to contracts being signed between Chinese and Irish companies amounting to the value of just under 40 million RMB (5 million Euros).
Moreover, June 2014 also saw the establishment of the Sino-Irish Technology Executive Society (SITES) which aims to bring together leading technology executives from the Republic of Ireland and the People’s Republic of China for a number of forums each year to promote cross-border trade.
2014 saw several trade missions from Ireland to China to expand trade and improve relations, missions that will be mutually beneficial and aid to further develop Ireland’s export market. There was an event organized by Enterprise Ireland which led to contracts being signed between Chinese and Irish companies amounting to the value of just under 40 million RMB (5 million Euros).
Moreover, June 2014 also saw the establishment of the Sino-Irish Technology Executive Society (SITES) which aims to bring together leading technology executives from the Republic of Ireland and the People’s Republic of China for a number of forums each year to promote cross-border trade.
Made in Korea?
Originally from: https://intrepidsourcing.com/made-in-korea/
For the past 20 years, North Korea shows up on the annual list of “potential” issues for business in China. All though China officially stopped offering oil and gas to North Korea, unofficially it still continues to supply them via aid or ‘unofficial’ channels.
As the Changjitu Regional Border Zone received state approval, Many Chinese factories in Jilin and Liaoning Provinces send clothing items to North Korea to be finished, then have them sent back to China with a “Made in China” label. In addition, North Korea’s Supreme Leader, Kim Jong-Un, is scheduled to meet Russian President Vladimir Putin in Moscow in May for slowing down Russian trade.
For the past 20 years, North Korea shows up on the annual list of “potential” issues for business in China. All though China officially stopped offering oil and gas to North Korea, unofficially it still continues to supply them via aid or ‘unofficial’ channels.
As the Changjitu Regional Border Zone received state approval, Many Chinese factories in Jilin and Liaoning Provinces send clothing items to North Korea to be finished, then have them sent back to China with a “Made in China” label. In addition, North Korea’s Supreme Leader, Kim Jong-Un, is scheduled to meet Russian President Vladimir Putin in Moscow in May for slowing down Russian trade.
Retreat in Shanghai
Originally from: https://intrepidsourcing.com/retreat-in-shanghai/
Chinese stocks in Shanghai are poised for a temporary retreat after their valuation premium over Hong Kong-traded counterparts surged to a more than 5-year high based. In addition, the Shanghai Composite Index, comprised mainly of yuan-denominated A shares, is valued at about 12 times estimated earnings after surging 34 % in the past 2 months.
Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, said by phone Dec. 30 “We would look for a pause in the A shares and probably even a decline, a pullback that we would consider as healthy”. More important is that the persistent discount demonstrates it is a good buying opportunity presently.
Chinese stocks in Shanghai are poised for a temporary retreat after their valuation premium over Hong Kong-traded counterparts surged to a more than 5-year high based. In addition, the Shanghai Composite Index, comprised mainly of yuan-denominated A shares, is valued at about 12 times estimated earnings after surging 34 % in the past 2 months.
Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, said by phone Dec. 30 “We would look for a pause in the A shares and probably even a decline, a pullback that we would consider as healthy”. More important is that the persistent discount demonstrates it is a good buying opportunity presently.
China Becoming a Mature Market
Originally from: https://intrepidsourcing.com/china-becoming-a-mature-market/
China’s leaders aim to shift the economy from a reliance on investment and exports for growth to one where consumption and markets play a bigger role. As a result, the government began promoting new policies , including a stimulating domestic demand, lowering the price of oil, enacting energy-pricing reforms, improving welfare coverage and privatizing firms.
The upside potential could reduce the negative impacts of poor debt repayment and increase the labor market as economic growth moderates. As the population ages and less workers enter the labor force, China can satisfy its labor demand with reduced levels of growth. It is truly the sign of a maturing economy.
China’s leaders aim to shift the economy from a reliance on investment and exports for growth to one where consumption and markets play a bigger role. As a result, the government began promoting new policies , including a stimulating domestic demand, lowering the price of oil, enacting energy-pricing reforms, improving welfare coverage and privatizing firms.
The upside potential could reduce the negative impacts of poor debt repayment and increase the labor market as economic growth moderates. As the population ages and less workers enter the labor force, China can satisfy its labor demand with reduced levels of growth. It is truly the sign of a maturing economy.
Bad Loans Heading North
Originally from: https://intrepidsourcing.com/bad-loans-heading-north/
Banks in the coal-rich regions of Inner Mongolia and Shanxi are dealing with high ratios of bad loans as miners deal with price slumps largely due to the slowdown in the Chinese economy. The ratio of bad loans in Inner Mongolia reached 2.2% while those of Shanxi exceeded 5%.
Based on the fact that the bad loan figures have started to rise this year (mainly from companies in the steel, shipbuilding and photo-voltaic industries in the Yangtze River Delta), Shang Fulin, chairman of the China Banking Regulatory Commission warned banks to take measures to control risks as slower economic growth became more common in December.
Banks in the coal-rich regions of Inner Mongolia and Shanxi are dealing with high ratios of bad loans as miners deal with price slumps largely due to the slowdown in the Chinese economy. The ratio of bad loans in Inner Mongolia reached 2.2% while those of Shanxi exceeded 5%.
Based on the fact that the bad loan figures have started to rise this year (mainly from companies in the steel, shipbuilding and photo-voltaic industries in the Yangtze River Delta), Shang Fulin, chairman of the China Banking Regulatory Commission warned banks to take measures to control risks as slower economic growth became more common in December.
BMW Doles $820 Million to Chinese Car Dealers
Originally from: https://intrepidsourcing.com/bmw-doles-820-million-to-chinese-car-dealers/
Bayerische Motoren Werke AG (BMW) agreed to pay 5.1 billion yuan ($820 million) to its distributors in China to help cover losses after retailers stopped ordering cars from the manufacturer.
BMW implemented this policy for 2 factors: a decline in shares and lower vehicle quotas. BMW shares fell as much as 2.8%, and there are an increasing number of factories in China imposing purchasing restrictions on vehicles. As a result both Toyota Motor Corp. and other dealers are going to drop out of the distribution network.
Bayerische Motoren Werke AG (BMW) agreed to pay 5.1 billion yuan ($820 million) to its distributors in China to help cover losses after retailers stopped ordering cars from the manufacturer.
BMW implemented this policy for 2 factors: a decline in shares and lower vehicle quotas. BMW shares fell as much as 2.8%, and there are an increasing number of factories in China imposing purchasing restrictions on vehicles. As a result both Toyota Motor Corp. and other dealers are going to drop out of the distribution network.
Jack Ma takes advantage of regulatory black hole
Originally from: https://intrepidsourcing.com/jack-ma-takes-advantage-of-regulatory-black-hole/
China's new shadow margin lending does not face any of the usual margin trading restrictions and provides up to 5 times greater leverage; however, it creates an oversight problem for the CSRC.
Since 2011 some, commercial banks and trusts have created ‘umbrella trusts. Under an umbrella, trust accounts are sub-accounts held by smaller private equity funds which receive funds for trading.
Therefore, the number of trades on margin is effectively limitless, creating a regulatory black hole.
This new form of margin lending is only made possible by HOMS and depends on the retail investor. Hangzhou Hundsun Technologies owns HOMS, and a Jack Ma subsidiary paid 3.3 billion yuan in April 2014 to become their largest and controlling shareholder that means without risking any of his own capital in the market, Jack Ma was in place early to benefit from the recent stock market rally.
China's new shadow margin lending does not face any of the usual margin trading restrictions and provides up to 5 times greater leverage; however, it creates an oversight problem for the CSRC.
Since 2011 some, commercial banks and trusts have created ‘umbrella trusts. Under an umbrella, trust accounts are sub-accounts held by smaller private equity funds which receive funds for trading.
Therefore, the number of trades on margin is effectively limitless, creating a regulatory black hole.
This new form of margin lending is only made possible by HOMS and depends on the retail investor. Hangzhou Hundsun Technologies owns HOMS, and a Jack Ma subsidiary paid 3.3 billion yuan in April 2014 to become their largest and controlling shareholder that means without risking any of his own capital in the market, Jack Ma was in place early to benefit from the recent stock market rally.
China's Finance Ministry Dealing with Debt
Originally from: https://intrepidsourcing.com/chinas-finance-ministry-dealing-with-debt/
Premier Li Keqiang has stepped up curbs on local borrowings just as LGFVs (local government financing vehicles) prepare to repay 558.7 billion yuan ($89.8 billion) of bonds this year amid economic growth that’s set for the slowest pace in more than two decades. In addition, debt that gets counted as local government debt will get definitive government support.
Therefore, in order to deal with the debt issue, firstly, China’s provinces must submit their reports classifying all local borrowings within their borders including those of LGFVs as either government debt or not by today. Secondly, the government should cut reliance on LGFVs. Thirdly, the government will impose stricter controls on new local government borrowings.
Premier Li Keqiang has stepped up curbs on local borrowings just as LGFVs (local government financing vehicles) prepare to repay 558.7 billion yuan ($89.8 billion) of bonds this year amid economic growth that’s set for the slowest pace in more than two decades. In addition, debt that gets counted as local government debt will get definitive government support.
Therefore, in order to deal with the debt issue, firstly, China’s provinces must submit their reports classifying all local borrowings within their borders including those of LGFVs as either government debt or not by today. Secondly, the government should cut reliance on LGFVs. Thirdly, the government will impose stricter controls on new local government borrowings.
Don't be Fooled on a Business Trip to China
Originally from: https://intrepidsourcing.com/dont-be-fooled-on-a-business-trip-to-china/
Foreigners always contact Chinese importers during business trips to China; however, they are unsure of the validity of the certification manufacturers provide. Many Chinese manufacturers have fake certificates of compliance. When these importers realize they have been duped, they want to sue their manufacturer; Chinese lawyers tell people it is usually difficult to sue Chinese companies since many companies are not actually manufacturers, but rather brokers.
Therefore, foreign businessmen should have a clearly written and signed (preferably in Chinese and preferably sealed) contract with the Chinese manufactures. In addition, do due diligence and verify the certification-number with the website of the third party who issued the doc can also help businessmen to avoid risks in China.
Chinese IP Protection Help Protect Your Business
Originally from: https://intrepidsourcing.com/chinese-ip-protection-help-protect-your-business/
Before you sell products in China, intellectual property is one of the most important things among all your strategies. There are 4 factors you need to take into consideration.
Before you sell products in China, intellectual property is one of the most important things among all your strategies. There are 4 factors you need to take into consideration.
- Firstly, your trademarks and patents in other countries are not going to protect you in China.
- Secondly, you must register the trademark or patent in the mainland China.
- Thirdly, you need to think long and hard about exactly what it is that your should be registering, especially the trademark in Chinese or English.
- Fourthly, companies need to take a long term approach to their China trademark filings.
Problem Solving in China
Originally from: https://intrepidsourcing.com/problem-solving-in-china/
Recently, I've been getting a lot of questions on how to handle business in China. I have my own style, however, smart business is about methodology. There are some rules I follow to solve problems with quality, remove the root cause and prevent recurrence of the same or similar issues:
Recently, I've been getting a lot of questions on how to handle business in China. I have my own style, however, smart business is about methodology. There are some rules I follow to solve problems with quality, remove the root cause and prevent recurrence of the same or similar issues:
- Create a team
- Describe the problem
- Implement and verify containment action
- Identify the root cause
- Formulate and verify corrective actions
- Correct the problem and confirm the effects
- Prevent recurrence and standardization
- Congratulate the team
Constructing a Contract in China
Originally from: https://intrepidsourcing.com/constructing-a-contract-in-china/
Our clients always ask, which contracts are the best to have. We usually recommend the following three (in English and Chinese from a Chinese law firm):
Our clients always ask, which contracts are the best to have. We usually recommend the following three (in English and Chinese from a Chinese law firm):
- NNN/NDA Agreements: NNN Agreements aim to protect the confidentiality of your product and to prevent your Chinese manufacturer from competing with you or circumventing you.
- OEM Agreements: You need an OEM Agreement after you chose a Chinese manufacture, it contains all of the substantive provisions of the NNN Agreements.
- China Trademarks: You should register your brand name and/or your product names and logos as trademark(s) in China, even if you will not be selling your product in China.
Shanghai Free Trade Zone Relaxing Car Import Restrictions
Originally from: https://intrepidsourcing.com/shanghai-free-trade-zone-relaxing-car-import-restrictions/
The Shanghai Free-Trade Zone allows the imports of foreign vehicles that could save consumers as much as 20%. The pilot program in Shanghai's FTZ, which opened in September 2013, has prompted speculation that prices for imported vehicles could fall by up to one-fifth.
For example, BMW sells an X5 xDrive35i model for 928 thousand yuan, but a parallel import in the FTZ is on sale for 760 thousand yuan. In addition, it is reported that the government is revising the 2005 rules on imports, which have been criticized for helping foreign companies and their dealers control prices of vehicles and services.
The Shanghai Free-Trade Zone allows the imports of foreign vehicles that could save consumers as much as 20%. The pilot program in Shanghai's FTZ, which opened in September 2013, has prompted speculation that prices for imported vehicles could fall by up to one-fifth.
For example, BMW sells an X5 xDrive35i model for 928 thousand yuan, but a parallel import in the FTZ is on sale for 760 thousand yuan. In addition, it is reported that the government is revising the 2005 rules on imports, which have been criticized for helping foreign companies and their dealers control prices of vehicles and services.
Volvo Producing for America in China
Originally from: https://intrepidsourcing.com/volvo-producing-for-america-in-china/
Volvo Car Group is poised to become the first major automaker to build cars in China for the U.S. market, underscoring the looming threat of Chinese imports to Detroit’s car makers. On the one hand, Volvo is more of an international product as opposed to a China product. Also, the Volvo brand has a lot of credibility.
Could this be a new trend? Probably not, but more companies might move in this direction slowly over time. Don't expect Ford or GM to start anytime soon.
Volvo Car Group is poised to become the first major automaker to build cars in China for the U.S. market, underscoring the looming threat of Chinese imports to Detroit’s car makers. On the one hand, Volvo is more of an international product as opposed to a China product. Also, the Volvo brand has a lot of credibility.
Could this be a new trend? Probably not, but more companies might move in this direction slowly over time. Don't expect Ford or GM to start anytime soon.
China High-Speed Rail Will Speed Up Trade Between China And Thailand
Originally from: https://intrepidsourcing.com/china-high-speed-rail-will-speed-up-trade-between-china-and-thailand/
On January 4, 2015, two locomotives arrived in Thailand, replacing the diesel locomotives from the United States. These two locomotives were among 20 locomotives purchased from China by Thailand's railway agency.
Premier Li Keqiang has said that if China's advanced equipment can be exported, it will make full use of spare production capacity while helping China upgrade its equipment. Therefore, both China and Thailand hope that both sides implement the preliminary railway project-related work for this project, in order to lay a good foundation to start construction as soon as possible.
In addition, the long-distance railway in Thailand will promote the construction of the Trans-Indochina railway which will promote trade and develop logistics channels between the 2 countries.
On January 4, 2015, two locomotives arrived in Thailand, replacing the diesel locomotives from the United States. These two locomotives were among 20 locomotives purchased from China by Thailand's railway agency.
Premier Li Keqiang has said that if China's advanced equipment can be exported, it will make full use of spare production capacity while helping China upgrade its equipment. Therefore, both China and Thailand hope that both sides implement the preliminary railway project-related work for this project, in order to lay a good foundation to start construction as soon as possible.
In addition, the long-distance railway in Thailand will promote the construction of the Trans-Indochina railway which will promote trade and develop logistics channels between the 2 countries.
Korea is Losing its Competitive Advantage
Originally from: https://intrepidsourcing.com/korea-is-losing-its-competitive-advantage/
The International Trade Research Institute has found the scale of Chinese general machinery imports from South Korea was $ 8.8 billion, a decrease of 4.5% and decline for a third consecutive year. The export scale of South Korean general machinery has been greatly reduced due to the downturn in China's domestic economy.The growth inventory in Chinese factory's and other internal factors also influence on the imports.
South Korea's export decline is also due to its falling competitive advantage. South Korea improve should promote SMEs to help develop a stronger competitive advantage and use the South Korean Free Trade Agreement to further explore the Chinese market.
The International Trade Research Institute has found the scale of Chinese general machinery imports from South Korea was $ 8.8 billion, a decrease of 4.5% and decline for a third consecutive year. The export scale of South Korean general machinery has been greatly reduced due to the downturn in China's domestic economy.The growth inventory in Chinese factory's and other internal factors also influence on the imports.
South Korea's export decline is also due to its falling competitive advantage. South Korea improve should promote SMEs to help develop a stronger competitive advantage and use the South Korean Free Trade Agreement to further explore the Chinese market.
How To Sell Your Medical Products To China
Originally from: https://intrepidsourcing.com/how-to-sell-your-medical-products-to-china/
China’s National Health and Planning Commission (NHPC) published a new policy this week stating the purchase of any products or services must be denominated in RMB and the purchase must be made from a Chinese company.
If you force the hospital to pay in dollars for a direct purchase from a foreign manufacturer, you are not likely to succeed in selling your product or your services to a Chinese government owned hospital. Here are the following levels of “local” for making a sale in China, starting with the least local:
China’s National Health and Planning Commission (NHPC) published a new policy this week stating the purchase of any products or services must be denominated in RMB and the purchase must be made from a Chinese company.
If you force the hospital to pay in dollars for a direct purchase from a foreign manufacturer, you are not likely to succeed in selling your product or your services to a Chinese government owned hospital. Here are the following levels of “local” for making a sale in China, starting with the least local:
- No China presence.
- Your company is in the United States, but it has a China distributor or sales agent that imports the product into China and then sells it to the Chinese hospital in RMB.
- You form a China joint venture and that company sells your U.S. made products to China’s hospitals.
- You form a China WFOE and that company sells your U.S. made products to China’s hospitals.
- You form a China WFOE and that company uses a domestic Chinese distributor or sales agent to sell your product to China’s hospitals.
- You form a China WFOE and that company actually makes your medical products and sells to China’s hospitals.
- You form a China WFOE and that company actually makes your medical products and uses a Chinese distributor or sales agent to sell your product to China’s hospitals.
- You form a China joint venture and that company actually makes your medical products and sells them to China’s hospitals.
- You form a China joint venture and that company actually makes your medical products and uses a Chinese distributor or sales agent to sell your product to China’s hospitals.
- You license the manufacturing of your product to a Chinese manufacturer.
Xi's Silk Road
Originally from: https://intrepidsourcing.com/xis-silk-road/
In cooperation with leaders of the Shanghai Cooperation Organisation (SCO), President Xi Jinping proposed the establishment of a new Silk Road that would encompass free trade throughout Central Asia. The SCO is an official grouping that includes China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan, with Afghanistan, India, Iran, Mongolia and Pakistan as observer states; Belarus, Sri Lanka and Turkey as dialogue partners; and ASEAN, the Commonwealth of Independent States (CIS) and Turkmenistan as guests.
Xi is looking to both find new markets and leverage some economic clout over the region’s vast oil and gas reserves, as well as minimize the potential for conflict that could spill over into China’s Xinjiang Autonomous Region by raising local incomes and wealth throughout the region.
In cooperation with leaders of the Shanghai Cooperation Organisation (SCO), President Xi Jinping proposed the establishment of a new Silk Road that would encompass free trade throughout Central Asia. The SCO is an official grouping that includes China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan, with Afghanistan, India, Iran, Mongolia and Pakistan as observer states; Belarus, Sri Lanka and Turkey as dialogue partners; and ASEAN, the Commonwealth of Independent States (CIS) and Turkmenistan as guests.
Xi is looking to both find new markets and leverage some economic clout over the region’s vast oil and gas reserves, as well as minimize the potential for conflict that could spill over into China’s Xinjiang Autonomous Region by raising local incomes and wealth throughout the region.
Entering China: A Brief Overview
Originally from: https://intrepidsourcing.com/entering-china-a-brief-overview/
If you’re thinking about getting into retail, you are undoubtedly thinking about sourcing from China; however, China’s emerging global economy is poorly regulated, leading to copyright problems and illegal business activities.As a result, trade with China can become pretty complicated. Here are some tips for you:
On Dealing with China in General: Successful traders say that it’s possible to do well in China but extreme caution must be taken for scam artists.
Chinese Products: To buy branded goods at wholesale prices, you must contact an authorized distributor of the product.
Finding Suppliers: Most traders recommend either using a buying agent who can be the go-between or finding legitimate wholesalers.
Our next posting will be on how to spot a scammer. Spoiler Alert: Many scammers are located in Fujian province.
If you’re thinking about getting into retail, you are undoubtedly thinking about sourcing from China; however, China’s emerging global economy is poorly regulated, leading to copyright problems and illegal business activities.As a result, trade with China can become pretty complicated. Here are some tips for you:
On Dealing with China in General: Successful traders say that it’s possible to do well in China but extreme caution must be taken for scam artists.
Chinese Products: To buy branded goods at wholesale prices, you must contact an authorized distributor of the product.
Finding Suppliers: Most traders recommend either using a buying agent who can be the go-between or finding legitimate wholesalers.
Our next posting will be on how to spot a scammer. Spoiler Alert: Many scammers are located in Fujian province.
It Is Not a Good Sign Your China Deal is Too Complicated
Originally from: https://intrepidsourcing.com/it-is-not-a-good-sign-your-china-deal-is-too-complicated/
Negotiating in China can get complicated fast, especially when Westerners ignore sensitive cultural and interpersonal issues during the negotiation part. Here are 10 warning signs for you:
Here are 10 warning signs that a deal is about to get too complicated too fast.
1.Terms that will change at unspecified times or circumstances in the future. This is particularly true of price, cost, product line or technology. As in “we’ll sell you the existing technology at price X, and when the new product line is ready we’ll lower the price to Y”. May also include: “when we move to the new facility…”, “when we get the approval from the government…”, “when we develop the new product…”, “when we hire the new engineer…”, “when we tie up with our sister company…” It’s not that they’re necessarily lying – but you can grow old waiting for the conditions to become reality.
2.New technology or connections to be introduced later – but priced now. Many Chinese companies will assure you that they have the ability to develop new products or technologies in the near future that will meet the needs you have now. Your big concern is that the first iteration of new technology won’t work – but will satisfy the terms of the contract. Your other concern is that they never hold up their end at all.
3.Asymmetrical payouts. You pay now – they deliver at some unspecified time in the future. This one was one of the big problems with all of those JV horror stories we used to read about.
4.Open ended liabilities or unsettled valuations. Every deal you do should have very specific valuations and timetables. You wouldn’t sign a contract with blanks – don’t do a deal until you’ve clarified all the terms.
5.Best effort sales / marketing. Another big red flag in China. If you are investing or supplying technology and relying on your local counter-party to market your product, make sure that they have a solid network, good references and specific experience in your industry. Make sure you have a way out and a Plan B. Chinese distributors are notoriously sketchy when it comes to fulfilling best-effort sales agreements.
6.Anything involving connections, relationships or trust. If they say “I have guanxi” you say “I have to go”. Seriously.
7.Mysterious new players enter – particularly decision makers – and change the terms. This can happen to anyone in any country, but in China it means you are starting over from scratch. This is a common tactic here, and it doesn’t bode well for your partnership. If you can’t meet the people you are really negotiating with then it is bound to end badly. This may be a deal-killer, so be careful about proceeding.
8.Deals escalate into long-term, multi-transaction JVs too quickly. If you want to buy or sell something, then you can start with a few test orders and develop the relationship over time. Don’t believe any noise about Chinese only working with long-term relationships. Reputable Chinese counter-parties work with test orders and short-term deals all the time.
9.They want you to do anything without a contract. Usually this takes the form “the owner/accountant/treasurer is away on vacation and we can’t stamp the contract until he’s back but if we don’t get the deposit now we won’t be able to make the deadline…” No. Just plain NO.
10.They tell you that something is too complicated to explain. They’re right. Walk away now.
Negotiating in China can get complicated fast, especially when Westerners ignore sensitive cultural and interpersonal issues during the negotiation part. Here are 10 warning signs for you:
Here are 10 warning signs that a deal is about to get too complicated too fast.
1.Terms that will change at unspecified times or circumstances in the future. This is particularly true of price, cost, product line or technology. As in “we’ll sell you the existing technology at price X, and when the new product line is ready we’ll lower the price to Y”. May also include: “when we move to the new facility…”, “when we get the approval from the government…”, “when we develop the new product…”, “when we hire the new engineer…”, “when we tie up with our sister company…” It’s not that they’re necessarily lying – but you can grow old waiting for the conditions to become reality.
2.New technology or connections to be introduced later – but priced now. Many Chinese companies will assure you that they have the ability to develop new products or technologies in the near future that will meet the needs you have now. Your big concern is that the first iteration of new technology won’t work – but will satisfy the terms of the contract. Your other concern is that they never hold up their end at all.
3.Asymmetrical payouts. You pay now – they deliver at some unspecified time in the future. This one was one of the big problems with all of those JV horror stories we used to read about.
4.Open ended liabilities or unsettled valuations. Every deal you do should have very specific valuations and timetables. You wouldn’t sign a contract with blanks – don’t do a deal until you’ve clarified all the terms.
5.Best effort sales / marketing. Another big red flag in China. If you are investing or supplying technology and relying on your local counter-party to market your product, make sure that they have a solid network, good references and specific experience in your industry. Make sure you have a way out and a Plan B. Chinese distributors are notoriously sketchy when it comes to fulfilling best-effort sales agreements.
6.Anything involving connections, relationships or trust. If they say “I have guanxi” you say “I have to go”. Seriously.
7.Mysterious new players enter – particularly decision makers – and change the terms. This can happen to anyone in any country, but in China it means you are starting over from scratch. This is a common tactic here, and it doesn’t bode well for your partnership. If you can’t meet the people you are really negotiating with then it is bound to end badly. This may be a deal-killer, so be careful about proceeding.
8.Deals escalate into long-term, multi-transaction JVs too quickly. If you want to buy or sell something, then you can start with a few test orders and develop the relationship over time. Don’t believe any noise about Chinese only working with long-term relationships. Reputable Chinese counter-parties work with test orders and short-term deals all the time.
9.They want you to do anything without a contract. Usually this takes the form “the owner/accountant/treasurer is away on vacation and we can’t stamp the contract until he’s back but if we don’t get the deposit now we won’t be able to make the deadline…” No. Just plain NO.
10.They tell you that something is too complicated to explain. They’re right. Walk away now.
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