Like a sports coach trying to develop an Olympic team, Beijing is continually hosting tryouts at different levels – testing the merits of companies – and awarding benefits accordingly. Local and central government officials evaluate high-tech SMEs against a broad suite of economic and innovation criteria. The best are granted special titles, receive access to subsidies and policy support, and are trained to become world-class competitors. Many listed Little Giants are openly pursuing Beijing’s goal of import substitution. As such, high-tech SMEs are explicitly intended to progressively replace foreign companies in China, and then challenge them in markets abroad. “Because Chinese truck exports have supplied the Russian civilian sector with trucks, Kamaz might be able to repurpose production lines for armored vehicles,” Webster said of Russia’s sanctioned, state-owned truck manufacturer.
Of course, if the product you want to manufacture in China is something simple like a stuffed bear, a sample will suffice and you won’t need drawings. Or if you want us to find an existing product that is widely available in China, such as a flash drive, made to a certain style, pictures showing the style would be enough. We’ve received drawings that just showed “aluminum”, but there are many different grades of aluminum with different tensile strengths, purity levels, machining, and finish characteristics. Getting a product manufactured in China isn’t difficult if you know the right steps to take.
The relationship-building process will slow your original timescale down somewhat, but finding an honest and reliable partner is all about trust in the eyes of the Chinese. They need to know if they can trust you, and to do this, they need to get to know you. The business side of the relationship can only go forward when they are comfortable. Companies that own property and/or IP are much less likely to scam you than those that don’t. We are seeing many more Chinese manufacturers on the irregular operations list than previously. Worse than that, we are also seeing more Chinese manufacturers showing up on the “operations revoked” list.
Recommendations for improving manufacturing
This is exactly what happened in 2009 and 2010, when Chinese exports (along with the country’s trade surplus) dropped by several percentage points of Chinese GDP. Read more about China Import/Export Consultants here. Beijing responded with a surge in government-directed property and infrastructure investment leading to what many believe was the beginning of China’s unsustainable debt surge. One way to balance a decline in net exports would be with an initial rise in investment driven by rising business inventories, so that the contraction in net exports would be matched by a rise in unwanted investment. If Chinese exporters suddenly and unexpectedly find themselves unable to sell everything they have produced and had previously sold abroad, the unsold production will accumulate as unwanted inventory. Notice that this is enough to satisfy the identity linking net exports with excess savings. Where PLv_GVCir represents production length of the country i sector based on forward link.
Everything You Need to Know About Manufacturing in China
I cannot recommend enough that as part of the selection process, you make a point of flying to China and touring the factories that will be used to manufacture your products. Not only will the visit assist in understanding the process itself, it will give you and the manufacturers common visual vocabulary in dealing with any issues that come up.
Hiring a sourcing agent is quite a common and often successful path that many entrepreneurs choose when seeking to manufacture their product in China. Being locally based and having local experience, sourcing agents will guide you along the way and help to negotiate with the manufacturer on your behalf.
VMI is ideal for those who find long lead times challenging and to deal with holidays like CNY, which could wreak havoc on a supply chain without proper planning. There are few things as valuable as establishing a strong relationship with your China supplier or manufacturing partner early on. If you’re sourcing from China and just beginning to build your supplier network, it will be difficult to build that relationship in the months immediately prior to CNY. There is immense pressure on Chinese factories right before CNY, and if your business is the newest account at the factory, it’s likely that your goods will be their last priority when it comes to order completion and shipping pre-CNY. If you’re working with a manufacturing partner, ensure that they have experience handling the CNY crush. Ask what measures they have in place to help their customers plan for CNY. One of the advantages of working with a manufacturing partner is that they usually have years of experience building a trustworthy supplier network and can help ensure your product is shipped on time during the hectic holiday rush.