The disruption led to a shift of U.S. importers to other Asian countries, driven in particular by firms with already established relationships in these countries. While most large U.S. customers continued trading with their Chinese suppliers, smaller U.S. customers appear to have had more difficulty continuing their relationships during the COVID-19 related shutdown. The key takeaway from the chart is that only relatively few small customers of Chinese suppliers made purchases in March. While 41 percent of the small customers of non-Chinese suppliers completed another purchase in March following the one in January, only 22 percent of small customers of Chinese suppliers did. Read more about Quality Control in China here. At the same time, there was no such difference for large customers. In fact, large customers of Chinese suppliers were even slightly more likely to trade again in March than large customers of non-Chinese suppliers. Regression results not displayed here show that these patterns hold even for trade of the same HS6 product.
Everything in this guide is written from the point of view of a startup or SME launching a new electromechanical product. Nothing here is outside of your reach (or ‘just for big companies’). Ensuring the quality of the product you are importing ultimately reflects the quality of your brand.
They have proper roads, connecting highways, big buildings, and large factories. Building a large list helps to reduce the feeling of scarcity as you develop relationships and negotiate with the most promising manufacturers. During your visit, you need to evaluate their capability including facility, experience, employees, and operational system. If possible, ask them for a reference project as well reference customer, which could be a proven if they are capable of manufacturing your products. How do I start manufacturing my own toy or game ideas with a factory in China? I cannot express how important social standing is in China and in most Asian countries, too. In the West, we can often drop the formalities of using titles once we’ve dealt with someone a few times, or after they’ve offered their first name to us.
How Trade with China Benefits the United States
Domestic consumption contributed to 54.3% of GDP and 75.8% of GDP growth in 2018. Over 28 million cars were sold in China in 2018, with retail sales of RMB 3.9 trillion.
How Indonesia Used Chinese Industrial Investments to Turn Nickel into the New Gold
Since you tend to fall in love with a manufacturer and entrust your entire project to them, you fail to take any precautions. These situations have killed thousands of new product manufacturing projects. The solution is well-known and applicable to your situation with a bit of adjustment. Attending a trade fair in China is a great way to get firsthand knowledge about how things work, see real samples, and talk to people in person.
Digre said his company also adjusted its supply chain to avoid punitive tariffs imposed by the US and China on each other amid their trade war that began in 2018. But relying solely on China operations is no longer considered the safest bet for manufacturers, as the country’s “world’s factory” status is not as strong as it was in the past. Compounding concerns is the fact that China faces a worsening demographic crisis that has made it more difficult for companies to hire skilled labourers. In China, manufacturers typically have better workflows, great labor productivity, and more automation.
Assume that there might be delays and develop alternatives and set up your supply chain so any single delay doesn’t muck things up too much. Your industry or company may have more issues that need to be addressed. When you’re weighing the pros and cons of production in China vs. places like Vietnam, Taiwan, Mexico, or domestically, you can compare and make a smart decision. Ask them to send photos of the factories and warehouses so you can see where your product will be made. If possible, send someone you trust over there on your behalf, given the very restrictive access to China at this point, so you can get a better idea of what will happen during production.