China still best choice for global outsourcing

Updated: 2013-11-05 17:25


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CHICAGO -- China is still the best choice for global manufacture outsourcing, US experts said at the 14th US-China Chamber of Commerce's Trade Conference in Chicago on Monday.

"China is still the choice because labor in China is efficient and the relationship that many companies have established cannot be easily replaced," Siva Yam, president of the US-China Chamber of Commerce, told Xinhua.

He pointed out that China has the advantage over other Southeast Asian countries with its big market -- not only for companies to outsource, but also for them to stay close to a large consumer market.

"China has good infrastructure," he told Xinhua. "It's not just the highway system, but also the educated labor force, sufficient suppliers, and distributors."

Some come to the conference to learn about outsourcing in China, while some who have already been doing so want to discuss their practice with others, he said, confirming the importance of sharing information on outsourcing in China.

"Compared to other countries that we used to expand our companies to, China is the most stable and high-growth market in the world," Andrew Rice, senior vice president of The Jordan Company, a leading global middle-market private equity firm, told Xinhua.

He emphasized that human capital is crucial, and that China has hundreds of thousands of managers who are well educated and have been trained by working in many of the Fortune 1,000 Companies.

"We've been focusing our outsourcing 100 percent in China for the last ten years," he said. His company manages $6 billion in assets.

"Supply chain in China is getting better and stronger," said Yen-Jung Lin, International Sourcing Director at Briggs & Stratton Corporation. "That means we get products and speed to the market."

"We used to have 40 to 50 percent saving. With various cost increasing in China, it's less now. But China is still our very critical partner."

She cited several reasons why China remains the best choice for outsourcing for many, including an established supply system, large engineering capacity, and a good labor force.

"Chinese employees are eager to learn and willing to work long hours," she said.

Jeff Albright, vice president of ESP International, a global engineered solutions provider, agreed that "China still has its competitive edge," stating that although wage cost is increasing in China, labor is not a major cost of outsourcing.

Pressured by high cost, most companies turn to outsourcing, said Stephan Cloutier, vice president at Mercury Marine, an engine manufacturer, and added that it is important to guarantee product quality.

"Our products made in China are of the highest quality and are sold around the world," he said.

Other cited positive aspects of outsourcing in China included positive government policies, competitive raw material cost, and a strong supplier network.

One important factor the experts shared is finding the right Chinese partners to work with in China.