China is Losing its Manufacturing Luster

Businessweek reports:

Two years of disastrous quality-control breakdowns, from foul fish and lead-tainted toys to poisoned drugs and dairy products, are taking their toll on China's allure as a manufacturing platform. A new study by supply-chain consulting firm AMR Research found that quality concerns are among the chief reasons U.S. manufacturers are scaling back plans to source more goods from China.

Instead, U.S. companies are looking harder at Mexico and other locales closer to home when exploring where to put new capacity. The findings are based on a survey of 130 U.S. manufacturers, ranging from producers of drugs (BusinessWeek, 9/4/08) and computers to auto parts. The survey, completed in mid-October, found a sharp swing in attitudes toward China since May, when AMR conducted a similar study.

The reasons for the shift suggest serious problems for China's export machine that go far beyond the concerns over rising costs for wages, shipping, and materials that got a lot of attention earlier this year.

To read more:

http://www.businessweek.com/bwdaily/dnflash/content/nov2008/db20081126_315336.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis

Comments

[David Collins]

Companies that are looking to Mexico as a closer to home alternative to a distant and increasing cost China should investigate the option of manufacturing in Mexico with The Offshore Group:

www.offshoregroup.com