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China Sourcing Blog
The China Sourcing Blog
An information platform for the procurement and trade industries in China



When the "African Tigers" compete (Sep 2)
This piece was originally produced for the ChinAfrica.

As costs increase in China and other Asian manufacturing countries, the "African Tigers" are competing to absorb displaced manufacturing capacity and become the next leaders of low-cost manufacturing. Recognizing the success of export-led manufacturing growth in bringing the Asian Tigers (Hong Kong, Singapore, South Korea and Taiwan) out of poverty, African business and political leaders are seeking to mimic this success at home. The leading East African economies of Ethiopia, Kenya and Rwanda provide competitive manufacturing environments with unique strengths.

In addition to low labor prices, low-cost African economies benefit from key duty-free and quota-free trade agreements, such as the United States' African Growth and Opportunity Act and the EU's Everything but Arms pact. However, these East African nations face a host of challenges in absorbing Asian manufacturing capacity. For example, many are unable to provide a stable ...


LETTER FROM CHINA: IPOs Bring Chinese E-Commerce Opportunity to the World (Aug 6)
This editorial was produced by The Beijing Axis for Business Day by Kobus Van Der Wath.

JD.com, China’s answer to the American online retailer, Amazon, released their initial public offering (IPO) on the Nasdaq Exchange in New York in late May. Based out of Zhongguancun (China’s technology centre in northwest Beijing and answer to California’s Silicon Valley), the Chinese e-commerce platform peaked at a market capitalisation of US$28 billion by the close of the first day’s trading, 2.4 times last year’s sale of US$11.5 billion and almost twice as large as Amazon’s market capitalisation. 

This offering, the largest of a Chinese web company ever, exceeded expectations and demonstrated faith that the level of Chinese economic activity online will boom, even as China’s GDP growth rate stabilizes around 7.5%.

Though JD has yet to record a profit, investors remain confident that this simply reflects investment in growth. In recent years, JD has, for instance, expanded it logistical capabilit...


LETTER FROM CHINA: IPR Developments Will Catalyse Innovation in China (Jul 28)
Inadequacy in China’s intellectual property rights (IPR) protection regime is one of the key challenges faced by foreign firms operating in and considering entry into China’s market. The world’s second-largest economy has a “first to file” system and is notorious for protecting local firms over foreign ones in disputes. However, recent developments - such as a deal with the Motion Picture Association of America (MPAA), the central government’s creation of a slew of IPR courts, and the emergence of intellectual property (IP) financing techniques - demonstrate China’s intentions to foster the innovation-oriented business environment it sees as leading future economic growth. The MPAA, the key enforcer of film copyright issues in the US, signed a deal with Shenzhen Xunlei Networking Technologies, a Chinese video hosting website to “prevent unauthorized access” to MPAA member copyrighted works. The two groups have a history of involvement. In 2008, MPAA sued Xunlei for supposedly pr...


LETTER FROM CHINA: Foreign Automakers are scrambling for China (Jul 7)
This editorial was produced by The Beijing Axis for Business Day by Kobus Van Der Wath.In recent weeks, global automakers have announced their intentions to increase their focus on China. For example, General Motors stated that it would invest USD 12 billion from 2014 to 2017, and VW recently announced plans to invest USD 25 billion from 2014 to 2018. These statements are unsurprising when one looks at the progress China’s auto market has made up to now, and the room it still has to grow into. Since 2000, when 1.8 million automobiles were sold in China, until 2013, when 21.98 million units were sold, sales growth reached a compound annual growth rate of over 20 percent.  China’s auto market exceeded 25 percent of the global automobile market by 2013 and is expected to become nearly a third of the world’s total auto sales by 2020 with roughly 34.7 million units. Furthermore, taking into account the fact that China’s projected car ownership rate (number of cars owned per 100 of the d...


Growth Stabilizes in China (Jul 1)
Thumbnail image for f04da234c5db14f558be45.png This article was originally produced for the ChinAfrica magazine. 

Despite continued distortion in trade data evaluation due to the propensity for fraudulent “over-invoicing” in the first half of last year, trade figures surprised analysts by rising in April.

Trade growth focused on the U.S. and EULargely as a result of trade with developed markets, both exports and imports increased in April. Exports increased from $170 billion in March to $188 billion in April, a 9-percent year-on-year increase. Imports, on the other hand, experienced 8-percent growth from $162 to $170 billion.Much of the growth in exports was directed toward developed countries. Exports registered to the United States, for example, jumped 12 percent in April from the previous year, a significant development considering the 11.3-percent decrease year-on-year in February and the 1.2-percent increase in February. An impressive 15.1-percent increase in shipments to the European Union occurred in April, compared to the...


Top Three CSR Challenges Facing Asian Factories (Jun 23)
This post is the second in a series presenting the current status of CSR sourcing in China. Read part one, A Primer on CSR Standards and Sourcing in China.

silk factory.jpg
In our sourcing projects, TBA has come across repeating infractions of corporate social responsibility (CSR) standards in Asian factories. TBA recently conducted a series of audits at factories in Southern China and Southeast Asia.  

The most commonly observed CSR infractions fall into the following categories: unsatisfactory workplace safety arrangements, overworking employees, and poor compensation and record keeping practices.  

Safety 

Audited factories faced many challenges related to: failing to plan for emergencies, and risky treatment of hazardous chemicals and other dangerous supplies. The most common safety infraction that our team witnessed was the lack of an evacuation plan. Our team also noticed that several of the audited plants had not installed smoke detectors, did not have access to fire hoses, and had locked o...


A Primer on CSR Standards and Sourcing in China (Jun 16)
This post is the first in a series presenting the current status of CSR sourcing in China. Part two will follow next week.

factory girl.jpgRecognizing the large scale of the social implications of actions taken by large firms, many firms began implementing Corporate Social Responsibility (CSR) policies in the mid-twentieth century. Today, producing a CSR report is a common marketing tool that allows organizations to demonstrate their support of social principles. Studies show a correlation between CSR activities, consumer activity, and appetite for high-quality goods and services. 

Because many factories in China have labelled themselves as SA8000 certified (an international social auditing standard), we use SA8000 as the foundation of our social audits. The following checklist forms the backbone of our social auditing activities in the Chinese and Southeast Asian markets. 

Also, the auditor should require factory managers to present all relevant documents for each requirement. In many cases, Chinese...


CIPS and The Beijing Axis Unite to Enhance the Procurement and Supply Profession in China and Hong Kong (Jun 11)
Thumbnail image for CIPS_CN_RGB.pngBEIJING – 9 June 2014 – The Chartered Institute of Purchasing & Supply (CIPS) has partnered with The Beijing Axis (TBA) to strengthen and support the procurement and supply profession in mainland China and Hong Kong. The Beijing Axis has extensive experience in servicing the procurement needs of multinational companies and established platform and networks in China and Asia. CIPS expertise lies in developing the procurement and supply management profession through specially-designed training, qualifications, products and services. The combined team will have the ability to better serve the mainland China and Hong Kong markets through a focused programme that synthesises global best practices with local delivery. Established in 1932, CIPS is the dynamic champion driving the global procurement and supply management profession and promotes licensing the profession, which encourages the advancement of best practice in the profession. As the world’s largest institute of its kind, CIPS w...


中外商桥和CIPS联手合作为中国大陆和香港地区提供采购及供应链培训及服务 (Jun 11)
CIPS_CN_RGB.png 北京——201469日,英国皇家采购和供应学会(CIPS)与北京中外商桥投资咨询有限公司(TBA)强强联合以加强和支持中国大陆和香港地区的采购和供应业务实力。 

中外商桥公司借助其在中国和其他亚洲地区的平台和关系网络,在为跨国公司针对其采购需求提供服务方面有着丰富的经验。CIPS专门为采购和供应管理领域的从业者提供定制化的培训、专业认证、产品和服务。强强联合的团队通过结合全球最佳实践方案和本地化交付的特色培训课程项目更好的服务于中国大陆和香港地区市场。 

CIPS成立于1932年,旨在通过其培训和资质认证促进采购领域最佳实践的发展,并源源不断地为全球的采购和供应管理领域注入活力。作为行业中最大的同类机构,CIPS这一非营利性组织于1992年获得英国皇家特许授权。其办事处遍布全球,包括英国、非洲、澳大利亚、中东和北非以及新加坡等地区,同时中国办事处也在筹建当中。CIPS的客户包括中华电力有限公司、卡特彼勒和美国运通等。 

北京中外商桥投资咨询有限公司是一家行业领先的,以中国为中心的全球采购服务商。中外商桥提供一系列横跨供应链的全球采购解决方案以平衡总成本、确保交付时间和产品质量的同时最小化风险。中外商桥的客户包括来自国际矿业、能源、制造、建设、工程、技术、保险、快消品和零售等行业的公司,有着超过11年为国际客户交付采购方案的经验。 CIPS与其合作伙伴中国交通运输协会在中国地区提供英语和普通话专业认证服务已超过10年,并于近日签订了为期5年的新合同。协同教育部考试中心和中国交通运输协会,CIPS在中国地区还开发了两个可以选择普通话教学的学位培训课程。 

CIPS的集团首席执行官David Noble这样看待合作关系:"中国和香港在全球经济发展中的地位举足轻重,而中国在东方的实力尤为突出。" 

"我们已经和区域内CIPS会员公司以及有关教育部门建立了稳固的关系,但我们想做得更多。此次与中外商桥结成的合作关系不仅将巩固CIPS已有的信誉和已经付出的行动,而且能够强化整个商界的采购和供应管理。" 

"我们在最合适的时机与CIPS结成了合作伙伴关系,可以看到中国大陆和香港的采购和供应类培训和专业认证领域正在快速发展。"中外商桥的创始人及总裁古柏先生说道。"CIPS的培训和专业认证服务,是对我们全球采购和供应链外包服务的一个补充。" 

初期,中外商桥...


China’s High-tech Parks: Beijing’s New “Go West” Strategy? (Apr 29)
Screen Shot 2014-04-29 at 11.16.34.png
China has recently opened a remarkable number of industrial development zones such as high-tech parks. These parks represent tools Chinese policymakers use in their attempt to encourage hubs of high-tech development, innovation and entrepreneurship. The Chinese government seeks greater high-tech development to accelerate the economy’s transition from a resource and capital-intensive economic model to a more advanced, service-oriented model. These zones represent the government’s attempt to reach its goals of both directing more foreign direct investment (FDI) and foreign technology to China.
 
These parks also present one prong of Beijing’s “Go West” campaign, in which the government aims to develop China’s inland provinces. Today, there are roughly the same number of industrial development zones, the larger category into which the high-tech parks fit in, in coastal provinces as there are across both China’s central and western provinces.
 
Chengdu, for example, aims to position one of ...
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