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

Company says the Cloud offering allows customers to respond more quickly to new business opportunities, without significant upfront cost and implementation times.

As e-commerce continues to take a bigger piece of the holiday package delivery pie, it stands to reason that companies need to be proactive and prepared in order to deliver premium service during the busiest time of year, which is rapidly approaching. And that is exactly what transportation giants UPS and FedEx are doing this year. How are they doing it exactly? The primary step they are taking is to up their numbers of seasonal staffers.

A recent hearing of the Subcommittee on Coast Guard and Maritime Transportation suggests that the U.S. Merchant Marine industry may be poised for a major comeback.

Spot market freight volumes for the month of August remained elevated compared to seasonal norms, according to data issued this week Portland, Oregon-based freight marketplace platform and information provider DAT.

Factors such as rising freight rates, shrinking capacity, an increased desire for global supply chain visibility, have all worked together to drive the need for instituting a culture of continuous improvement in logistics operations and transportation management systems (TMS). To meet today's complex logistics challenges, managers are stepping into a more streamlined, automated approach to transportation management in order to function at optimal levels both domestically and internationally. Read the latest special report.

Article Topics

Blogs · Supply Chain · Manufacturing · Panjiva · All topics

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA