china dis issue56
TRANSCRIPT
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Li & Fung Research Centre
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China Distribution & Trading Issue 56 December 2008
IN THIS ISSUE :
Li & Fung Research Centre
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I. The changing 2
manufacturing
landscape
II. Policy direction: 7
industry relocation
and upgrade
III. Implications for 14
sourcing business
LI & FUNG RESEARCH CENTRE
Chinas industry relocation andupgrading trends:
implications for sourcing business
China is no doubt one of the most important sourcing centers in the world. However,
the business environment facing manufacturers in China has become tougher since
2007. Their profit margins are being squeezed to such a degree that some of them
have been forced to shut down. There is thus growing concern over the industry
consolidation and relocation trends of manufacturers in China, and the impacts onsourcing business in China.
The changing manufacturing landscape
- The ongoing factory consolidation will cause adjustment pain but will facilitate
industrial upgrading in the long run.
- Industry relocation is taking place. It is a gradual process that one should closely
monitor.
- On the other hand, many manufacturers are actively seeking to transform and
upgrade themselves, through strengthening their core competencies, increasing
investment in R&D, and upgrading their equipment and facilities, etc.- The emergence of domestic enterprises and manufacturers outside the coastal
area should not be ignored.
Policy direction: policies have been launched by both central and local
governments to promote industry relocation and upgrade
- The Ministry of Commerce plans to set up 50 designated areas by 2010 in
central and western China for enterprises moving out from coastal regions.
- The local governments of the central and western region regard the relocation
policy as an opportunity to develop industries and boost economic development
and are actively improving their business environment and offering various
incentives to attract relocation.
- The traditional manufacturing hubs in the coastal provinces, such as Guangdong
province, also see the importance of industry relocation and upgrade and are
actively promoting relocation in their vicinities.
Implications for sourcing business
- China remains a favorable place for sourcing.
- Buyers should be cautious when looking for alternative sourcing country.
- Buyers should pay attention to the sourcing potential of other emerging cities in China.
- Suppliers management is increasingly important.
- China is not only the worlds factory, but also a consumer market not to be missed.
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China is one of the most important sourcing centers in the world. The presence of abundant skilled labor, thousands ofvibrant industrial clusters, political stability, rapidly developing transport infrastructure, etc. make its manufacturing sector
highly competitive. As Chinas manufacturing sector grows in strength and sophistication, many foreign companies regard
China not only as a place to buy cheap and quality products, but also a major manufacturing hub and research and
development (R&D) centre.
However, since 2007, Chinas manufacturing sector has been hit hard by factors like slackening global demand especially
after the outbreak of the subprime crisis and financial tsunami, production cost hikes, renminbi (RMB) appreciation,
processing trade policy change and tightening monetary policy. Manufacturers profit margins are largely slashed to a
degree that some production was forced to cease. Factory consolidation and relocation is taking place, which has
aroused great concern among buyers and retailers.
In this paper, we will first look at the new developments in Chinas manufacturing sector, including factory consolidation,
relocation and industrial upgrade. Then, we will discuss the policy initiatives launched by both central and local
governments towards industry relocation and upgrade. Lastly, we will analyze the impacts of these new developments on
sourcing strategies.
I. The changing manufacturing landscape
1. The ongoing consolidation will cause adjustment pain but will facilitate industrial
upgrading in the long run
The business environment for mainland manufacturers has become much tougher. Export-oriented enterprises in these
industries have encountered extremely difficult situation export growth of garments and toys fell sharply to 1.8% yoy and
3.7% yoy in 1-3Q08, compared to 20.9% yoy and 20.3% yoy respectively in 2007. In November 2008, Chinas industrial
production growth fell to a record low of 5.4% yoy (excluding the January-February New Year factor). As a result, a
number of players in these industries have ceased operations this year. Sudden closure of factories is commonplace.
According to the Department of Small and Medium-Sized Enterprises of the National Development and Reform
Commission (NDRC), 67,000 small and medium-sized enterprises (SMEs) above designated size in China were closed
down in 1H08. Many traditional big manufacturing and export hubs have also been hit hard. According to the Hong Kong
Chamber of Commerce, there used to be 70,000 to 80,000 Hong Kong manufacturers in the Pearl River Delta area, most
of which are in the export-oriented, traditional light industries. However, it is reported that, since late-2007, approximately
15% of them have closed down.
The ongoing factory closure has led to unemployment problems and the spillover has affected other sectors like
transportation and logistics, catering, property, etc. The Chinese policy makers have taken numerous measures to ease
the hardship facing the enterprises and to boost economic growth. One of its recent moves is to raise export VAT rebate
rates for numerous products and thus, improve exporters margins. Further policy adjustments targeting struggling
exporting industries are likely to be made, which may include supporting policies such as providing better financing
access for SMEs, and broadening the value-added tax reduction scheme for fixed asset investments.
Nonetheless, the consolidation trend is irreversible. The marginal players will be gradually phased out of the market while
the survivors will grow stronger and bigger. In the long run, we expect to see an overall industrial upgrading.
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Type II enterprises are mainly foreign-invested processing trade enterprises with strong mobility. Given its export-orientednature, they are unlikely to move to inner provinces of China due to the high transportation cost from the inland to the coast.
They are more likely to relocate to less developed cities along the coast or other low-cost countries in South or Southeast Asia.
Type III enterprises are cost-cautious. As they focus on the domestic market, they will tend to stay in China and relocate
from the high-cost coastal region to the inland regions; while some may move to other low-cost countries nearby.
To better illustrate, lets look at the case of shoes industry, a traditional labor-intensive industry. Shoes-making is relatively
low value-added and the production chain is short and not very sophisticated. In general, shoes manufacturers do not rely
heavily on the local industrial clusters. Their geographical mobility is strong. It is observed that an increasing number of
Taiwanese export-oriented shoes manufacturers have moved their production facilities to other Southeast Asian countries.
For those who focus on domestic sales, they tend to set up production facilities in central and western China including
Sichuan, Hunan, Jiangxi, Guangxi and Henan provinces. For instance, Aokang Group ( ) of Wenzhou had already
initiated a group of eight enterprises engaging in shoes making to relocate to Bishan County of Chongqing in September
2003. As of end-2007, a total of 218 shoes enterprises have set up their presence in Chongzhou ( ) of Sichuan.
(2) Expansionary relocation
Instead of relocating the whole factory or production base, a number of manufacturing enterprises opt for expansionary
relocation. Many manufacturers maintain the original scale and operation of their production bases in the coast, while
setting up satellite factories in less developed areas. The higher value-added functions such as sourcing of raw materials,
product development and design are generally handled by the main factory in the coastal area in a centralized manner,while the inland facilities focus on production. In this way, the coastal and inland regions complement each other and the
overall competitiveness is enhanced. Some large enterprises in coastal regions have already started to relocate part of
their non time-sensitive and simple production process to inland provinces. In the long run, the coastal region is going to
be development-focused while the outlying regions will be more production-focused.
Exhibit 2 Expansionary relocation
Source: Li & Fung Research Centre
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All in all, most enterprises will adopt a gradual approach instead of relocating the whole production at one go. Manycompanies tend to relocate the labor- or resource-intensive processes to inland cities as the first step. Once the
supporting facilities in the inland cities have improved, they will consider relocating the more complicated processes. This
approach allows a transitional period for adaptation of new production sites, lowers operation risks and eases their
financial burden.
(3) Factors constraining relocation
At present, there are a lot of constraining factors discouraging manufacturers from relocating. Numerous surveys showed
that many manufacturers in China are not ready for relocation and most of them adopt a wait-and-see attitude. The Hong
Kong Trade Development Council (HKTDC) interviewed about 4,000 manufacturers in the PRD in June 2007 and found
that over 60% of the respondents did not have plans to relocate in the next three years (2008-10). Federation of Hong
Kong Industries (FHKI) interviewed about 200 enterprises in the PRD in March 2008 and found that shortage of skilled
labor, high logistics costs and inadequate support from local governments of the less developed regions were the major
obstacles barring enterprises from relocating at the moment. However, as the transport infrastructure develops, the
increasing penetration of highways and rail lines into the inland regions should be a catalyst for relocation.
3. Industrial upgrade
On the other hand, we witness an upgrading trend of manufacturers in China, not only because of the growingly
challenging business environment but also because of the increasingly stringent government policies on product quality
and environmental standards, as well as the rising global calls for safer and quality products. Many manufacturers areactively seeking to transform and upgrade themselves, through strengthening their core competencies, increasing
investment in R&D, and upgrading their equipment and facilities, etc.
HKTDC has conducted a survey with about 2,000 Hong Kong traders and manufacturers and the results were announced
in September 2008. The findings reveal that the major reasons driving the respondents to upgrade included meeting the
market demand for the development of new products, exploring new business opportunities, and fighting against
competition from the Chinese Mainland (see Exhibit 3).
Exhibit 3 Reasons for industrial upgrade
Reasons for industrial upgrade % of respondents
Keep abreast of market/ customer requirements on product development to avoid falling behind 55.2
Develop new products to explore new business opportunities 53.8
Withstand competition from Chinese Mainland enterprises 47.0
Develop higher value-added products to ensure profitability 46.7
Comply with ever more stringent overseas requirements on product safety/specification 38.8
Demand for high quality products from Chinese Mainland consumers as their income level rises 17.6
Withstand competition from other regions 9.8
Higher Mainland production capability can support production of higher value-added/ high-tech 9.5
products by Hong Kong enterprises
Mainland industrial upgrade will boost demand for high quality precision industrial products 8.2Others 4.3
Source: Hong Kong Trade Development Council (HKTDC), September 2008
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Exhibit 4 demonstrates possible ways of industrial upgrade, including improving product quality and efficiency, expandingalong the supply chain to embrace more high value-added functions like R&D and marketing, and produce higher value-
added products.
Exhibit 4 Industrial upgrade
Source: Li & Fung Research Centre
According to the HKTDCs survey in September 2008, 84.7% of the respondents had invested in different areas in the
past three years to upgrade their production. Most of them have strengthened quality control, improved design and
engineering capabilities, and further developed competence in R&D (see Exhibit 5).
Exhibit 5 Strategies to transform and upgrade
Areas received investment in the past three years % of respondents
Strengthening quality control 72.7
Improving design and engineering capabilities 68.8
Enhancing product R&D capabilities 56.1
Complying with green production requirements 47.3
Raising production technology and automation levels 40.6
Source: Hong Kong Trade Development Council (HKTDC), September 2008
Apart from self-initiated enterprises, the government also makes efforts to promote industrial upgrade. For example, the
Dongguan government has committed to channel five billion yuan in the coming 5 years to assist Dongguan enterprises
in R&D and innovations.
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4. The emergence of domestic enterprises and manufacturers outside the coastalarea
Today, domestic enterprises are growing both in scale and strength. They are now spending more efforts in product
development. They are also benefited from the Corporate Income Tax reform, which reduces their tax rate and puts them
on a level playing field with foreign enterprises. In the less developed regions, many manufacturers are growing fast amid
the rapid economic growth. We saw an increasing number of labors who used to work in coastal regions went back to their
hometowns (mostly in inland provinces) and started their own business there after accumulating sufficient experience,
network and capital. Also, after some years of efforts, some retailers managed to get a foothold in the inland provinces,
and they set up production facilities in the vicinity of their retail sites to take advantage of proximity to market.
II. Policy direction: industry relocation and upgrade
The Chinese government sees industry relocation and upgrade as a strategic step to push forward economic
restructuring and achieve balanced growth of different regions. Many government policies have been launched by both
central and local governments to promote industrial upgrade and relocation.
1. Central governments policy initiatives
According to the Chinese development plan, the large coastal cities are positioned to develop high value-added industries
and modern services such as producer services and commercial services. Therefore, the government wishes to move out
the edge-losing labor intensive and low value-added industries from the coastal regions so that space and resources can
be released to develop higher value-added industry, while at the same time boost the economic development of central
and western China.
The Ministry of Commerce (MOFCOM) plans to set up 50 designated areas by 2010 in central and western China for
enterprises moving out from coastal regions. Measures such as loans from State Development Bank, tax incentives, and
building supporting facilities (e. g. water supply, electricity supply, waste management, sewage management, education,
warehousing and transportation) will be implemented to encourage relocation. So far, the MOFCOM has announced two
batches of designated areas, i.e. a total of 31 sites (See Map 1 and Exhibits 6 & 7).
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Map 1 Designated areas for industry relocation by the Ministry of Commerce as of end-2008
Source: Ministry of Commerce (MOFCOM), Li & Fung Research Centre
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Exhibit 6 The first batch of designated relocation areas, MOFCOM, 2007
The first batch of nine key relocation destinations was selected by the MOFCOM in April 2007. All of them are located in
central China.
Province City
Hubei ( ) Wuhan ( )
Hunan ( ) Chenzhou ( )
Henan ( ) Xinxiang ( )
Jiaozuo( )
Jiangxi ( ) Nanchang ( )
Ganzhou( )
Shanxi ( ) Taiyuan ( )
Anhui ( ) Hefei ( )
Wuhu ( )Source: MOFCOM
Exhibit 7 The second batch of designated relocation areas, MOFCOM, 2008
The second batch of designated relocation areas was announced in April 2008. Most of the 22 selected cities are located
in central and western parts of China.
Region Province/Municipality City
Central ( ) Hubei ( ) Yichang ( )
Xiangfan ( )
Hunan ( ) Yueyang ( )
Yiyang ( )
Yongzhou ( )
Henan ( ) Luoyang ( )
Zhengzhou ( )
Jiangxi ( ) Yian ( )
Shangrao ( )
Shanxi ( ) Houma processing zone ( )
Anhui ( ) Anqing ( )
Western ( ) Guangxi ( ) Nanning ( )
Qinzhou ( )
Sichuan ( ) Chengdu ( )
Mianyang ( )
Chongqing ( )
Shaanxi ( ) Xian ( )
Ningxia ( ) Yinchuan ( )
Yunnan ( ) Kunming ( )
Others Hainan ( ) Haikou ( )
Inner Mongolia ( ) Baotou ( )
Heilongjiang ( ) Harbin ( )Source: MOFCOM
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2. Initiatives launched by local governmentsThe local governments of the central and western region regard the relocation policy as an opportunity to develop
industries and boost economic development. To attract enterprises seeking to relocate, local governments of these
designated regions are actively improving their business environment and offering various incentives such as tax breaks,
subsidies and funding support. Exhibit 8 shows the various incentives offered by the designated regions to attract
relocating industries.
Exhibit 8 Examples of the incentives provided by some inland provinces/cities to attract relocating industries
Provinces/cities Examples of the incentivesHubei ( ) Designated funds to support relocation; improving transport infrastructure
Hunan ( ) Designated funds to support relocation; improving services in logistics centres and customs;
simplifying the approval procedures of relocation projects
Guangxi ( ) Improving government services; providing financial support; promoting electronic monitoring
systems at customs
Yueyang ( ) Tax breaks; simplifying customs procedures
Chenzhou ( ) Subsidies on construction of production plants; improving transport infrastructure
Haikou ( ) Waiving administration fees of some of the government services during the course of relocation
Sources: Compiled by Li & Fung Research Centre from various sources
The traditional manufacturing hubs in the coastal provinces also see the importance of industry relocation and upgrade.
However, aggressive relocation to other provinces will bring harm to the local economy. Thus, they are actively promoting
relocation in their vicinities. Guangdong province is a case in point. In late May 2008, Guangdong announced the Decision
on Encouraging Industry and Labor Relocation ( ) (also known as Double
Relocation ) in which measures and funds are designated to facilitate industry and labor relocation within the
province. To summarize, Double Relocation refers to:
(1) Industry relocation: relocation of traditional labor-intensive industries, resources-consuming industries, processing
industries from the central PRD to less developed regions in the province, i.e. the eastern and western PRD and
northern Guangdong;
(2) Labor relocation: relocation of labor engaging in primary industry to secondary and tertiary industry; and relocation of
skilled labor from less developed regions to developed regions in PRD.
Map 2 illustrates the Double Relocation strategy of the Guangdong province. More than 40 billion yuan has been
earmarked for measures encouraging Double Relocation in the coming five years (2008-2012). Resources will be
allocated to improve transport infrastructure, develop industrial relocation parks, develop pillar industries, set up an award
fund to encourage relocation, provide training to nurture skilled labor, improve productivity of farmland and increase land
supply in less developed regions in the province.
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Map 2 Double Relocation of Guangdong province, 2008
Source: Guangdong Government, Li & Fung Research Centre
Subsequently, the Guangdong government released the Guidelines on the Layout of Industry Relocation Regions in
Guangdong Province ( ) (the Guidelines) in June 2008 to guide relocation of industries
in central PRD to the less developed areas within the province in a coordinated manner.
In the Guidelines, the government stipulated that the relocation process is going to be a coordinated one a number of
selected industries will be encouraged to relocate to designated areas to achieve a clear division of work and to avoid
direct competition among regions; while an array of industries, especially those causing serious pollution, will not be
allowed to relocate. Also, the government has identified more than 20 industrial relocation parks within Guangdong as
shown in Exhibit 9 and Map 3 below.
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Exhibit 9 Provincial industrial relocation parks identified by the Guangdong government
Region (M-Mountainous
area; E-Eastern PRD;
Industrial relocation parks* W-Western PRD) Approved industries to be relocated
1 Shenzhen Yantian (Meizhou) M Electronic information, electrification and automation
( )
2 Shenzhen Futian (Heping) M Watches and clocks, electronic and
telecommunications equipment
3 Shenzhen Nanshan (Chaozhou) E Machinery and new materials
4 Shenzhen Longgang (Wuchuan) W Electronics and toys
5 Dongguan Shijie (Xingning) M Automobiles and metal machinery
( )
6 Dongguan Shilong (Shixing) M Electronics, precision machinery and equipment
7 Dongguan Dongkeng (Lechang) M Machinery and furniture
8 Dongguan Fenggang (Huidong) M Shoes and household electronic appliances
9 Dongguan Qiaotou (Longmen Jinshan) M Apparel and furniture
( )
10 Dongguan Dalang (Haifeng) E Electronic information and bio-technology
11 Dongguan Dalang (Xinyi) W Textile and processing of agricultural products
12 Dongguan Changan (Yangchun) W Electrical appliances and apparel
13 Zhongshan Sanjiao (Zhenjiang) M Electronic information and machinery
e.g. auto parts
14 Zhongshan Dachong (Huaiji) M Furniture and metal products
15 Zhongshan (Heyuan) M Telecommunications equipment and machine tools
16 Zhongshan Torch (Yangxi) W Textile, apparel, food and pharmacy
( )
17 Zhongshan Shiqi (Yangjiang) W Electronic information and household electronic
( ) appliances
18 Foshan Chancheng (Yuncheng Duyang) M Machinery and furniture
( )
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Region (M-Mountainous
area; E-Eastern PRD;
Industrial relocation parks* W-Western PRD) Approved industries to be relocated
19 Foshan (Qingyuan) M Machinery and pharmacy
20 Foshan Shunde (Yunfu Xinxing Xincheng) M Machinery for light industry and telecommunications
( )
21 Shunde Longjiang (Deqing) M Lighter (tobacco tools) and furniture
( )
22 Foshan Chancheng (Yangdong Wanxiang) W Metal machinery and furniture
( )
23 Foshan Shunde (Lianjiang) W Manufacturing and processing of small household
appliances
24 Guangzhou Baiyun Jianggao (Dianbai) W Electrical appliances, textile and apparel
( )
Source: Guangdong Government
* The name of the industrial relocation parks provides information on the original location of industries as well as the location of the industrial
relocation park. The place in the bracket refers to the location of the relocation park. For example, Shenzhen Yantian (Meizhou) means that
enterprises in Shenzhen Yantian are encouraged to relocate to the relocation park in Meizhou.
Map 3 Industrial Relocation Parks in Guangdong
Source: Guangdong Government, Li & Fung Research Centre
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Apart from boosting relocation to its vicinities, the Guangdong government also regards Southeast Asian countries aspartners for industry relocation and upgrade. To foster closer economic ties, in September 2008, a Guangdong
delegation, led by the Party Secretary-General Wang Yang, paid a visit to the ASEAN Secretariat and some of its member
countries, and signed an agreement aimed at deepening and widening cooperation and business platform between
Guangdong and ASEAN. Trade contracts worth billions were signed and dialogue mechanism with the ASEAN
Secretariat and some of the member countries was established. Moreover, Guangdong has successfully presented the
business opportunities brought by its relocation plan: some of Guangdongs labor intensive industries could relocate to
countries such as Vietnam and Indonesia while enterprises with competitive edges in services and management from
countries such as Singapore are encouraged to invest in Guangdong.
III. Implications for sourcing business
1. China remains a favorable place for sourcing
While sourcing from other countries may be necessary for diversifying risk, and will take over some shares from China,
those countries will not be able to replace China as the manufacturing hub. Earlier in 2008, PricewaterhouseCoopers
carried out an interview with about 60 companies from eight countries on their sourcing activities, and found that 83% of
the respondents still regarded China as their first choice for global sourcing. The HKTDC survey in September 2008
shows similar result: 64% of some 2,000 Hong Kong traders and manufacturers said they would expand the sourcing
base in China.
Indeed, in the foreseeable future, there is no substitute large enough to replace China as the global factory. Besides, as
the manufacturers in China are constantly upgrading and the government tightens its control over product quality and
safety, the quality of Chinese-made products are set to improve rapidly. The ongoing factory consolidation should also be
conducive to an overall industrial upgrading. Furthermore, the Chinese Governments aggressive steps in developing the
logistics and infrastructure in the central and western regions and the preferential relocation policies should facilitate the
growth of manufacturing sector in the less developed regions. A large pool of competitive manufacturers outside the
traditional manufacturing hubs is set to emerge.
Besides, over the long run, China has two key advantages. First, its large domestic market can generate sufficient
demand required for efficiency enhancement or technological advancement in manufacturing. Second, the relatively
sophisticated manufacturing capabilities of China and its well-established industrial clusters in the PRD and YRD strike an
excellent balance between low cost and high quality, which is also difficult to be replicated by elsewhere quickly. In any
case, buyers are advised to keep a close watch on the suppliers move and begin to explore sourcing opportunities in
other parts of China or even other emerging economies.
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2. Buyers should be cautious when looking for alternative sourcing countryChina plus one is a strategy intended to mitigate risk and control costs. Companies are expanding their sourcing bases
elsewhere in Asia so as not to be overly dependent on factories in China. When extending sourcing network to low-cost
countries, one should not solely look at production costs. Factors such as availability of industrial clusters, manufacturing
capabilities of different countries, political and economic environments, quality of labor force, transportation and logistics,
business practices and culture should also be taken into account. For example, though the labor and rental costs are low
in Vietnam, high inflation and poor infrastructure may well offset the unit cost advantages. India is a populous country with
very cheap labor, yet investors will face problems such as limited geographical mobility of labor due to cultural factor and
poor transport infrastructure. Production cost is low in Bangladesh, but its supporting facilities are still immature. Thailand
and the Philippines are often politically unstable.
3. Buyers should pay attention to the sourcing potential of other emerging cities in
China
Buyers should no longer concentrate solely on the traditional manufacturing areas. As the manufacturing sector in the
less-developed regions develops and the industry relocation process continues, more competitive factories and a wider
range of product will be available for the buyers to select. Though currently many factories in those regions are still in
infant stage, their long-term potential cannot be ignored. Buyers should start exploring and nurturing relationship with
these emerging suppliers.
4. Suppliers management is increasingly important
Since 2007, cases of sudden closures were observed. Buyers are advised to stick to quality suppliers with sound
management and up to standard production, enhance communication with suppliers, and keep a close watch on their
operating and financial conditions. On the other hand, an increasing number of suppliers in China are upgrading
themselves and they now have stronger product design and development capabilities. Buyers could therefore leverage
on the growing strength of their suppliers, for example, by involving their suppliers in their product design and
development processes.
5. China is not only the worlds factory, but also a consumer market not to be
missed
Chinas retail sector is expanding fast and has maintained double-digit growth for the past few years. Exhibit 10 shows
Chinas total retail sales of consumer goods from 1990 to 2007. The total retail sales of consumer goods hit 7,788.6 billion
yuan in 1-3Q 2008, representing an increase of 22.0% yoy.
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Exhibit 10 Total retail sales of consumer goods, 1990-2007
Source: National Bureau of Statistics, China
Seeing the huge potential of Chinas consumer market, many buyers and manufacturers which are originally export-
oriented are now flipping their supply chains over and targeting at the domestic sales opportunities instead. According to
the HKTDCs survey in September 2008, 46.5% out of some 2,000 Hong Kong traders and manufacturers indicated that
they would consider expanding their retail business in China.
On the other hand, some export-oriented buyers want to tap into Chinas lucrative consumer market but often found it
difficult as many of their suppliers in China are processing trade factories with no domestic selling right. However, as we
observed, this situation should be improved gradually as many processing trade enterprises in China are now
transforming to foreign-invested enterprises (FIEs) with domestic selling right amid the weakening global demand.
Copyright 2008 Li & Fung Research Centre. All rights reserved.
Though Li & Fung Research Centre endeavours to have information presented in this document as accurate and updated as possible, it accepts noresponsibility for any error, omission or misrepresentation. Li & Fung Research Centre and/or its associates accept no responsibility for any direct,
indirect or consequential loss that may arise from the use of information contained in this document.