Manufacturing News and Trends

Moving production to China: It’s getting tougher

Many manufacturers say China is throwing up roadblocks to outside companies with operations there.

The American Chamber of Commerce in China released results of its annual Business Climate Survey. (The full results will be made available soon in a C of C whitepaper.) More than 400 companies took part in the survey designed to determine how business-friendly China is to U.S. companies, especially manufacturers.

Some of the results of the survey:

  • 71% of respondents believe the licensing process in China effectively discriminates against foreign companies
  • 35% said licensing procedures are growing increasingly difficult for everyone, and
  • 70% rate China’s enforcement of intellectual-property-rights laws as either “ineffective” or “totally ineffective.”

On top of that, China is beginning to see rampant inflation, driving up the costs of labor and raw materials.

In a related AP story,  China has responded to U.S. complaints about intellectual property by arresting 3,000 people in a sweep of copycat manufacturers selling unauthorized knock-offs of U.S. goods.

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  • http://graymetal.com PO’d Mfg Guy

    I worked for a U.S.-based company that reburbished printer cartridges in a China operation. We collected the empty cartridges in the U.S. and sent them to China for remanufacturing. In about 2007 the Chinese gov’t decided they didn’t want us importing empty cartridges from the U.S. in to China any longer. We moved the operation to Mexico. So some 500 Chinese jobs were lost – who cares? – and about 400 were gained in a drug-infested Monterrey. The bad part is the U.S. opeation where I worked closed in 2009. Jobs lost to China at first, then to Mexico.
    As China continues to prosper I think they will become stricter about their business climate. Good! Maybe it will entice some of the U.S. companies that dumped U.S. jobs for cheaper Chinese labor to return them here.