Outsourcing cheap manufacturing jobs to China has created a multitude of so called ‘sweat shops” which are now being transformed into hi-tech conglomerates with fast growing international business deals.
The cheap labor in China has attracted a multitude of foreign companies. US companies outsourced their manufacturing plants and jobs to China to take advantage of low production costs which helped to stabilize retail prices in the US and increase their margins.
The inflow of foreign capital has helped China’s economy warp itself into the 21stcentury as is visible in their monthly and quarterly economic data.
Academics who witnessed this manufacturing shift from west to east did not envision that such would lead to China branding out into designing its own high-end clothing lines, electronics department stores and investing large amounts into research and development.
As labor costs rise in China, so does the diversification of many Chinese companies and the trend is already visible in the garment and technology industries.
The TAL Group, the garment maker for JC Penney and Wal-Mart, is now electronically tracking the entire inventory for both companies from garment plant to shipping to the stores near you.
The company is expanding its large garment plant in Dongguan, situated on the Pearl River delta and only a bus or train ride away from Hong Kong, to include brand name clothes for export to the US consumers.
The clothes will be designed and manufactured in China and seek to compete for a US market share with the likes of J. Crew, Ralph Lauren and the Gap, among others.
A second Chinese company, Chicony, who currently makes parts for Microsoft and Dell, has opened three retail stores to sell its own gadgets and hi-tech products and is planning to open an additional 7 stores.
Within the next ten years we will no longer worry about the label “made in China” even though the brand is American. We will witness the rise of original Chinese brands and products in stores around us and their quality will stand up against and compete with the best in the industry.
China is a very fast learner. By accepting a fish from foreign investors they have learned that fishing themselves is far more rewarding and lucrative and the US and Europe are perfect trading and import partners for their new high quality products.
Written by Nick Doms © 2010, all rights reserved.
Comments