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Pros And Cons Of Importing Products From China: Important Recommendations
Every time we find the label "Made in China" we are reminded that China is a place where various items are manufactured for a fraction of the US cost and sold to over a billion potential buyers. Corporate giants such as Wal-Mart are investing intensely in China. Thousands of small to medium sized businesses are getting in on the action too. In fact, it can be said that 2000 was the decade that got thousands of entrepreneurs to study how to import goods from China.
China has enjoyed an average 9.5% yearly growth during the past 10 years, and its Gross Domestic Product (GDP) increased from $ 300B in 1985 to $ 1,600B in 2004, higher than the state of California. Meanwhile, its export-import volume has increased twelve-fold! Foreign direct investment has reached $ 550B within the same period. China's blistering modernization from 1990-2010 made importing goods from China very attractive to retailers around the world.
The country's first production census discovered that from 2004 to 2007, the GDP growth rate was of 10% each year. In 2007, the officially recorded GDP growth rate was 11.4 %. In 2008, the worldwide economic crisis began to lower China's growth rate. In the face of these forecasts, the government decided to pour Rmb (China currency) 4 trillion into the economy in the form of an economic stimulus plan consisting mostly of investments in fixed infrastructure and human capital.
Even though in early September 2009 mainland China was engaged in new trade problem with the US over the imposition of an emergency duty on Chinese tires, a full-blown trade war has a very small possibility as this is not in the best interest of both countries. Mainland China is the number one creditor of the US, while the US is the Mainland's second biggest export market following the European Union. A trade war between two of the world's biggest economies will furthermore be bad to the global recovery just underway. China import export is here to stay, for now.
Northern Asia commonly (Japan, South Korea, Taiwan, Vietnam, and Mainland China) is a great region for manufacturing products (Vietnam is like China fifteen years back).
The clear advantage of Mainland China today lies in the low production, labor and advanced quality control procedures, making it by far the most appealing place of the region.
In addition, bear in mind that Chinese suppliers will give you with what you request, even if it is not comply with their production standards. They have a remarkable ability to produce a very unique design by combining several existing ideas you might have submitted to them. While Westerners do not necessarily like (or are even capable to) adapting their production standards to special customer demands, a Chinese company would consider this a standard characteristic of their service.
Standardization like ISO or 6-Sigma is not very popular in China, but is implemented by the higher end companies. However, regardless of your order quantity, quality control with China is a MUST. You must receive what you order and in the exact way you ordered it. From simple to sophisticated products you need to check quality control with Chinese producers. Implement multiple QC check points during different stages of manufacturing. An importer's worst nightmare is getting a full container load of merchandise that is defective because of a wrong screw size, for example. If you still try to sell them, or sell merchandise that you don't know was designed wrong and later falls apart, this brings massive product returns, angry customers, and an accounting/billing department nightmare. As the Chairman of your own venture, you are responsible for ensuring that your products adequately meet desired specifications.
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