Subscribe to our free, weekly email newsletter!



China will no longer be the “default” sourcing destination

By Patrick Burnson, Executive Editor
January 21, 2011

Panjiva, an online search engine with detailed information on global suppliers and manufacturers, has joined those experts predicting a substantial boost in sourcing expenses.

“In 2011, manufacturing costs will rise,” Panjiva (http://panjiva.com/) CEO Josh Green, noted in a recent blog post.

He added that for years, China’s huge labor pool helped keep global manufacturing costs down, but wages are escalating.

“China’s move toward a more flexible Yuan amplifies the effect of wage increases. But perhaps the most important thing going on in China is the rise of its middle class — a middle class that is demanding goods and services,” Green added.

In a poll conducted with its clients, Panjiva learned that it was “jarring” for Americans to see China prosper while the U.S. held on for dear life through the Great Recession.

“Meanwhile, Chinese leaders have over a billion mouths to feed and are unwilling to take measures that could jeopardize additional growth,” Green said. “In 2011, we will continue to see an economic recovery that is uneven, and we will continue to see fear about the future as a driving force in shaping government policy.”

Green has also joined the chorus against protectionist rhetoric and more protectionist policies. While he does not see an all-out trade war, he is predicting “flare-ups” that will create headaches for sourcing executives in a variety of industries.

As a consequence, said Green, China will no longer be the “default” destination, and sourcing teams will need to grow their capabilities outside.
More of his forecast can be found at:

http://panjiva.com/blog/2011/01/03/global-sourcing-what-to-expect-in-2011#respond

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Private fleet managers are facing a remarkable set of challenges in today's demanding business environment. The "from any place at any time" omni-channel fulfillment mindset is just one significant development that companies have had to adapt to in their quest to keep customers and business partners happy.

This is the first guaranteed weekly service direct to the U.S. from Singapore as part of the company’s initiative to enhance its LCL offerings serving Trans-pacific needs.

The city and Port of New Orleans have been roaring back since the catastrophic Hurricane Katrina struck ten years ago.

To help manufacturers choose the right software, this interactive guide explores four key technologies that are essential to any successful manufacturing operation.

Economist Brian Beaulieu sees an improving economy over the next 24 months, with forward thinking companies expanding their capabilities. Is your supply chain ready for 2017?

Article Topics

Blogs · Supply Chain · Manufacturing · Panjiva · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA