FLEXIBILITY.
China has become the place to outsource to over the last decade, and a large amount of companies have already done this, but there are still risks in doing so. In the present climate, suppliers have gone out of business, and this creates large disruptions for the customer when it occurs. It is therefore important that customers remain flexible and multi-source their components or goods.
SUPPLIER NETWORKS.
It is important that customers utilise established UK companies to source and set up production with supplier networks in China, to achieve the cost savings that customers seek. By using established UK companies, relationships with the Chinese suppliers are already in place, especially in terms of honesty and integrity, and therefore a large part of the risk of "going on your own" strategy is removed.
ARE LOWEST COSTS BEST?
When sourcing in China, customers must look at whether they wish to go down the "lowest cost route" or down "a low cost route". The "lowest cost route" normally gives risk as suppliers are in the lower quality bracket, cutting corners, poor facilities, facilities which the customer would not use back in the UK and you get what you pay for. If the customer wishes to go down this route, then China may not be the offshore country he should be using. The better option is the "lowest cost route" where suppliers are of a standard which ensures that suppliers have quality accreditation's, that they follow a QMS system, operate to audited procedures, and have facilities which the customer would feel was there own company. The costs will not be the cheapest, but over time, as relationships build, there will opportunities to achieve cost downs on goods.
SUPPLIER LOCATIONS.
Part of the selection of a supplier must be the location of the facilities, as things like a proper infrastructure, allowing goods to be quickly moved from the factory to the port, Government incentives to used companies in special development location, good transport locations with major motorway facilities, ease of entering and exiting China on business trips. In addition, there certain cities which are noted for manufacturing a certain type of product, which means it will difficult to achieve competitiveness elsewhere in China.
CULTURAL DIFFERENCES.
Cultural differences are the most important changes from the west. When doing business with Chinese suppliers, you will find that discussing technical points, it will involve the full team, and discusions on a single point will take time, something the west are not used to. One of the other main points is the breaking off for lunch which will take 11/2 - 2 hours, again something the west are not prepared for. Be polite, as to be abrupt may send the wrong message. Also remember, a large amount of discussion and work is carried on during the evening meal, so also be prepared for this.
I hope that this small insight into doing business in China has been helpful, and should you require any further information, please contact Source-in-Asia Today Limited, who will be only too pleased to help or discuss any points you have.
Thursday 18 February 2010
Thursday 11 February 2010
Chinese Manufacturing continues to expand.
Chinese manufacturing expanded at its fastest rate in 20 months in December, official figures show.
The latest data suggests that the Chinese economy has further consolidated its recovery from the global downturn, although travelling around Southern China, the number of factories which have closed is still large.
China's official PMI (Purchase Managers Index) stood at 56.6 in December, up from 55.2 in November. This index is the benchmark for all figures relating to manufacturing growth in China, and is the best measure for future economic activity.
The latest data suggests that the Chinese economy has further consolidated its recovery from the global downturn, although travelling around Southern China, the number of factories which have closed is still large.
China's official PMI (Purchase Managers Index) stood at 56.6 in December, up from 55.2 in November. This index is the benchmark for all figures relating to manufacturing growth in China, and is the best measure for future economic activity.
Tuesday 9 February 2010
GREEN FUELS AND VEHICLES, 2010 CHINA.
The Innovation and Industrialisation in Alternative and Conventional Vehicles.
April 8th and 9th, 2010 - Shanghai.
Under the Global Energy Crisis, alternative vehicles are becoming more popular. China still has a large say in conventionally manufactured vehicles, but are moving quickly to the alternative powered vehicles, especially with battery powered vehicles.
The above Event is focusing on green conventional and alternative fuels within the automotive industry, looking at technical innovations in automotives, hybrid vehicles, electric vehicles, and conventional vehicles.
For more information, please visit www.greenfuels-vehicles.com
Thursday 4 February 2010
Chinese New Year
By the Chinese Calendar
2010 is the Year of the Tiger,
which is also known by its formal name of Geng Yin.
The Chinese New Year Festival Starts on February 14th 2010.
Chinese New Year or Spring Festival is the most important of the traditional Chinese holidays. It is sometimes called the "Lunar New Year" by English speakers. The festival traditionally begins on the first day of the first month (Chinese: 正月; pinyin: zhēng yuè) in the Chinese calendar and ends on the 15th; this day is called Lantern Festival. Chinese New Year's Eve is known as chú xī. It literally means "Year-pass Eve".
Within China, regional customs and traditions concerning the celebration of the Chinese new year vary widely. People will pour out their money to buy presents, decoration, material, food, and clothing. It is also the tradition that every family thoroughly cleans the house to sweep away any ill-fortune in hopes to make way for good incoming luck. Windows and doors will be decorated with red colour paper-cuts and couplets with popular themes of “happiness”, “wealth”, and “longevity”. On the Eve of Chinese New Year, supper is a feast with families. Food will include such items as pigs, ducks, chicken and sweet delicacies. The family will end the night with firecrackers. Early the next morning, children will greet their parents by wishing them a healthy and happy new year, and receive money in red paper envelopes. The Chinese New Year tradition is a great way to reconcile forgetting all grudges, and sincerely wish peace and happiness for everyone.
2010 is the Year of the Tiger,
which is also known by its formal name of Geng Yin.
The Chinese New Year Festival Starts on February 14th 2010.
Chinese New Year or Spring Festival is the most important of the traditional Chinese holidays. It is sometimes called the "Lunar New Year" by English speakers. The festival traditionally begins on the first day of the first month (Chinese: 正月; pinyin: zhēng yuè) in the Chinese calendar and ends on the 15th; this day is called Lantern Festival. Chinese New Year's Eve is known as chú xī. It literally means "Year-pass Eve".
Within China, regional customs and traditions concerning the celebration of the Chinese new year vary widely. People will pour out their money to buy presents, decoration, material, food, and clothing. It is also the tradition that every family thoroughly cleans the house to sweep away any ill-fortune in hopes to make way for good incoming luck. Windows and doors will be decorated with red colour paper-cuts and couplets with popular themes of “happiness”, “wealth”, and “longevity”. On the Eve of Chinese New Year, supper is a feast with families. Food will include such items as pigs, ducks, chicken and sweet delicacies. The family will end the night with firecrackers. Early the next morning, children will greet their parents by wishing them a healthy and happy new year, and receive money in red paper envelopes. The Chinese New Year tradition is a great way to reconcile forgetting all grudges, and sincerely wish peace and happiness for everyone.
Monday 1 February 2010
Aluminium Production Increases in China.
Primary aluminium production in China rose to 1.331 million tonnes in December, 2009, from 1.327 million tonnes in the previous month, an industry report showed on 29th January. Data from the international Aluminium Institute (IAI) showed China's primary aluminium production for 2009 at 12.964 million tonnes from a record high of 13.105 million tonnes the previous year.
China Automotive Sysyetms to Supply Chrysler North America.
Wuhan-based China Automotive Systems, a power wteering components and systems supplier in China, has announced that its first Global OEM customer is the Chrysler Group LLC, which is headquartered in North America.
In November 2008, CAAS recieved its first order from Chrysler to export power steering gears to Chrysler's North America assembly facitlity. Since mid-2009, the steering gears have been exported from China to the United States and installed in the Chrysler's Jeep Wrangler models.
Chrysler conducted an initial screen and review of CAAS's research and development capacity, quality control and production capabilities as part of the supplier development process. CAAS and Chrysler next created a framework for their future joint development. The company successfully passed several product evaluations and road tests resulting in Chrysler accepting the company's power steering gears and issuiing a purchase order.
CAAS also announced that it has begun production of its electronic power steering system. This new electronic power steering product and technology represents the first such steering system developed internally within China. The Company is currently supplying this EPS system at a rate of 2,000 units per month to Suzuki Auto in China.
The comapny is in the process of opening a reasearch and development centre in Henglong in Jingzhou City.
In November 2008, CAAS recieved its first order from Chrysler to export power steering gears to Chrysler's North America assembly facitlity. Since mid-2009, the steering gears have been exported from China to the United States and installed in the Chrysler's Jeep Wrangler models.
Chrysler conducted an initial screen and review of CAAS's research and development capacity, quality control and production capabilities as part of the supplier development process. CAAS and Chrysler next created a framework for their future joint development. The company successfully passed several product evaluations and road tests resulting in Chrysler accepting the company's power steering gears and issuiing a purchase order.
CAAS also announced that it has begun production of its electronic power steering system. This new electronic power steering product and technology represents the first such steering system developed internally within China. The Company is currently supplying this EPS system at a rate of 2,000 units per month to Suzuki Auto in China.
The comapny is in the process of opening a reasearch and development centre in Henglong in Jingzhou City.
Chinese Trivia.
QUESTION
The kite, a Chinese Invention, has been praised as the forerunner of the modern airplane. In the pavilion of aircraft of the National Aeronautics and Space Museum in Washington, a plaque says, "the earliest aircraft are kites and missiles of China".
The kite is mainly, but not only, a plaything. It has contributed to science and production. The first planes were shaped after a kite.
What was the earliest kites made from:
A. Paper:
B. Carbon Fibre:
C. Wood:
D. Silk.
ANSWERS
If you say A, you are wrong, but on the right path. The first kites from the Warring States Period (475-221BC) were made from wood, as paper had not yet been invented.
The kites were called muyuan (wooden kites) and once paper had been invented, kites began to be made of this new material called zhiyuan (paper kites).
Instead of being playthings, early kites were used for military purposes. Historical records say they were large in size; some were powerful enough to carry men up in the air to observe enemy movements, and others were used to scatter propaganda leaflets over hostile forces.
The kite, a Chinese Invention, has been praised as the forerunner of the modern airplane. In the pavilion of aircraft of the National Aeronautics and Space Museum in Washington, a plaque says, "the earliest aircraft are kites and missiles of China".
The kite is mainly, but not only, a plaything. It has contributed to science and production. The first planes were shaped after a kite.
What was the earliest kites made from:
A. Paper:
B. Carbon Fibre:
C. Wood:
D. Silk.
ANSWERS
If you say A, you are wrong, but on the right path. The first kites from the Warring States Period (475-221BC) were made from wood, as paper had not yet been invented.
The kites were called muyuan (wooden kites) and once paper had been invented, kites began to be made of this new material called zhiyuan (paper kites).
Instead of being playthings, early kites were used for military purposes. Historical records say they were large in size; some were powerful enough to carry men up in the air to observe enemy movements, and others were used to scatter propaganda leaflets over hostile forces.
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