Riding Risks with China Sourcing

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The main aim of China Sourcing is to create an understanding of the country as a source for top class technology services. But, for many electronic buyers China is a land of opportunity as well as risks, a significant challenge to deal with. The large scale production market of electronic goods like semiconductors and connectors continues to grow. The international market for electronic connector grew around 11% in 2003 but according to the reports of the industry researcher Bishop & Associates China led the world with a 30% growth rate.

However, while many low-cost components can be sourced as a part of China Sourcing, but these come with a few problems for buyers. Product quality from native suppliers is often a matter of great concern. Price is again an issue and component class takes a back seat. Forged components continue to be a trouble. Some components are just shells, and there is no performance guarantee. Some products may carry the name of a leading brand but it can be just eyewash.

Most of the troubles are related to the food and drugs industry though problems in some finished manufactured goods have happened such as the infamous Chinese tire recall. People rapidly change their views in lieu of politics in the country. China sourcing is also held up for political reasons. Nevertheless, wholesaler-distributors will have to keep close eye on their sourcing partners rather than facing the risk of future problems. China Manufacturers are in for an increase in China export tariffs or a reduced rebate rate. For the western counterparts prices will increase, they could be as small as 2% or a great increase of more than 10%. Distributors and wholesalers are wary of these facts and are cautious enough to avoid risk factors.

Clogging at North America's West Coast ports and ongoing capacity problems at major European ports have convoluted the China sourcing equation to a large extent. Companies are considering possible alternatives-This is the expertise version of The Boston Consulting Group (BCG).

Many of us are aware that the global infrastructure is not supporting the velocity of our trading growth with China. While there is still some surplus capacity at major European ports, and measures are being taken to increase capacity, the situation in the US is far worse and problematical—with many ports experiencing practical deadlock. Because there is no politically feasible explanation, they say, the effectual outcome is 'a massive non-tariff trade barrier.'"

But China sourcing clearly presents an opportunity for companies in the manufacturing sector with a number of risk factors. Buyers encounter certain apprehensions regarding the quality of goods manufactured in china, especially in the supply of drugs and food products. Top class quality and safety are an important focus in international trade. Therefore Quality issues cannot be taken lightly in view of China Sourcing in the B2B market. Hence, it has become necessary to view China Sourcing in the wake of the quality problems that are happening in the B2B market. But with large volume of sales, problems is an inevitable part of any trade market.

Article Source: http://depositarticles.com/

Tootoo.com is the leading B2B Portal and Vertical search Engine for Global sourcing. Please visit us at: www.tootoo.com/?source=articles

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