Foreign investors have made China the world’s factory. With a good supply of labor (and other lower costs) and high-quality production capabilities, China continues to attract foreign manufacturers. Because China is highly competitive on making products at a lower cost, many foreign companies look to source parts and components there. Some large foreign multinationals are moving their global procurement centers to China. As China moves up the food chain into higher-value products, more companies are procuring higher- quality products and components from China. Chapter 13 can tell you more about manufacturing.
In the meantime, China has made massive investments in the country’s infrastructure. New airports, highways, bridges, tunnels, trains, and ports have sprung up across eastern China. This brand-new infrastructure has the potential to allow transportation companies to develop more sophisticated support services for logistics and express carriers, air cargo, and sea freight. Third-party logistics services in China are seeing explosive growth in supporting manufacturing-driven export services.
The sourcing capabilities aren’t just for the benefit of large multinational companies. Small- and medium-sized companies are jumping on the bandwagon, too. They can now get access to high-quality products and components to stay internationally competitive. They can also avoid middlemen or buyer’s agents to keep their prices even lower. Many small- and medium-sized companies are trying to secure their future by lowering costs while maintaining high quality standards.
