A DIFFERENT TAKE ON CHINA
Updated: Feb 13
While the China downturn is in the news lately, one of our industry contracts has a more nuanced view….
The subject is China, that is, is the “declining China market” a precursor to declining business opportunities between our countries? More specifically, is Global Sourcing more or less risky in light of recent ‘collapses’ in China’s business climate?
First of all, China is far from falling apart. Business opportunities in our marketplace today are still waiting to be discovered and taken advantage of. True, so much has changed over the decades. But there is still so much yet to be discovered in Taiwan and China in the way of business opportunities. Yes, the field is very crowded now with so many companies from here “discovering” what The Orient has to offer.
China is going through some difficult transitions at this time We’ve seen it before on a much smaller scale. Too many companies have sprung up, many of them not worthy of participating in the Global marketplace. The Chinese government has been underwriting/subsidizing these marginal companies and encouraging more. That has come back to haunt them. The Sleeping Giant woke up and now has a terrible headache from overeating. What we see now happening in China is the purge.
The good news is that the surviving companies, of which there are many, are tightening their belts, stabilizing their costs and properly reorganizing for better times. In the interim, what you see happening will continue until things stabilize again. And they will.
So any talk of chicken little, that the sky is falling…..as it pertains to China….is inaccurate. Is China business good right now? Not at all. Businesses which have major investments in China surely have a problem. Huge currency issues? Absolutely. All of this is more applicable to the banks and the biggest industries. The supply chain for us is pretty much insulated…..it’s business as usual here.