As you all know, China's status as an outsourcing destination and manufacturing hub has experienced a decline because of the news which pertains to non-compliance of quality when these products are done in China.

Personally, I really wanted to know if these news have affected China even in a little way. Of course, the figures that I've been waiting for would not be released at today and I really have to wait for it. Luckily, I've stumbled in this article written by Karen Klein which also deals with the same topic.

Karen was able to interview Peter Zapf, vice-president of community development for Global Resources, a Hong Kong trade show producer and consultancy. This issue was raised during the conversation and here is an interesting excerpt:


There's been so much negative publicity. Don't you think that importers are going to be scared off of manufacturing in China?

I think anybody that's looking to grow a long-term business has to look at China as a sourcing option, for two big reasons. One is the very competitive labor costs, and the other is the increasing number of new and innovative products that are coming out of that lower-cost labor market. In the past, 20 or 30 years ago, manufacturing was done in Japan, Taiwan, and Korea. In the future, who knows where it will move? But it's necessary for every company to evaluate the different sourcing options and understand the risks and benefits of each of them.

Frankly, China has lower labor costs, but it also has higher logistics costs, especially to manage a production line and have packaging done in English. Someone who wants to source in China needs to think about total landed cost, and whether they will get the product they need. It's not enough just to have something manufactured at low cost. It also has to meet all the company's specific product requirements and the country's regulatory requirements.

What do you think?