Instapundit on China Sourcing
January 15, 2007 by SwizStick
Filed under Education, Supply Chain Management
We’ve been talking about this for a long time now, starting in late 2005, but you know it’s finally hit the big time, in blogosphere terms, when Instapundit gets around to talking about it as well:
China’s political stability is not to be taken for granted, and it’s a mistake to put too many eggs in that one basket. (Via Gerald Hibbs). On the price front, I think that China is facing the need to shift from being a low-cost supplier to being more competitive in higher-end areas, a transition that some countries have found difficult, though I think that China is well-situated to negotiate that change.
In his post Glenn Reynolds links to a piece in the Economist with this key quote:
In the calculus of costs, risks, customers and logistics that goes into building global operations, an increasing number of firms are coming to the conclusion that China is not necessarily the best place to make things. . . .
As costs and risks rise in China, companies – including Chinese ones – will seek greener pastures elsewhere.
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