SCDigest Editorial Staff
| Tyndall Says: |
 We continue to see a lot of activity in China for both sourcing and distribution,” Tyndall. “The multi-nationals know that the only sales growth in the near-term will be in emerging markets.
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Amid the financial crisis and global economic slow down, some observers are betting that the powerful rush towards globalization will slow dramatically and perhaps even reverse itself.
Indeed, there were some indications this was happening even before the brewing financial crisis kicked into high gear. (See Is the World Going Unflat?). Now, some companies are seeing their Chinese suppliers disappear, as tens of thousands of manufacturers in China shut their doors. (See Will there Turn out to be a “China Import Bubble” Too?)
"There are some changes going on for sure, but not as dramatic as some of the reports would have you believe,” said Gene Tyndall, Executive Vice President at Tompkins Associates and an SCDigest Contributing Editor.
“There is a lot of news - and rumors - about thousands of China factories closing and assertions that North American and European multi-nationals are bringing sourcing and production back, but that trend is being over exaggerated,” Tyndall says.
The trend is both a matter of degree and China Government policy, Tyndall says.
For example, while thousands of Chinese factories are closing, 98% are for low-end commodities that the government there wants to transition out of anyway, Tyndall says.
He also says more of those closing are related to the economic downturn and not due to the supply chain strategies of the multi-nationals.
(Global Supply Chain and Logistics Article - Continued Below) |
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He also notes that China continues to invest in infrastructure and new plants that make high-end components and products, and that the Chinese government has recently announced a series of stimulus plans to build out still more infrastructure and stoke export business, which is still positive but currently well down in terms of the growth it enjoyed over the past few years.
