The manufacturing industry in China has in the last year been affected by both the US-China trade conflict and now lately by the COVID-19 virus.
Regarding the US-China trade conflict it will likely go on for some time regardless of administration in the US, as the unbalance in trade flow and openness of the market still has a long way to go.
This has had both positive and negative effects on Chinese factories. In our work with mostly European clients, factories have in the past often had a limited interest in smaller order sizes and has had a preference from American companies, who used to order in large volumes and pay well. We have seen some change in attitude during last year and more flexibility in taking on smaller volume orders.
At the same time there is of course an increasing risk that companies who lost American business will either close down, but more likely change direction. In both cases you face the risk of losing a supplier.
For the COVID-19 epidemic, we can say China was lucky that it happened during the time of the year when all factories anyway were closed down for Chinese new year, and are used to the problems getting workers to come back in time so it was a situation they knew how to handle.The well-coordinated and effective effort by the government to stop the spread also minimized the downtime.
The industry is now back on track while the rest of the world are closing down. A domestic stimulus package is expected to kick-start the economy and many new opportunities in domestic business will emerge. Also here there is a risk that Chinese businesses will find new more exciting opportunities.
The resilience and flexibility of Chinese businesses is their biggest strength, but also a potential threat to supply chains.
It is adviced to regularly visit and audit your suppliers to check their status and direction. If you need support Scandic Sourcing has a competent team on the ground in China. We conduct supplier audits, quality system audits, quality control and assist in purchasing administration and control. Talk to us if you have any questions: .
The situation with the Wuhan Corona virus will affect China sourcing for some time. Several factors including travel restrictions affect the possibility to work with suppliers. Just now Scandic Sourcing has stopped all field inspections and audits. When the situation has stabilized we will be back in the field again. Please contact us if you have questions about and read more about the details below.
After 12 years at the South Huangpi Road Office, Scandic Sourcing has moved to new premises. The new office is located on 525 East Jianguo Road only 5 minutes walk from the previous and is located in the center of Shanghai, with easy access to metro and highways. " It was time to upgrade to more functional and fresher facilities" says Per Linden, CEO of Scandic Sourcing. The new office houses the Scandic Sourcing team, Scandic administration team and several Scandic Launch Pad customers.
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525 East Jianguo Road, 1208,Huangpu District, Shanghai 200025, China
Tel: +86-21-6386 6018
Metro: Madang Road (Line 13 and Line 9)
Scandic Procurement Solution
Scandic Sourcing recently rolled out a new Procurement Service on a subscription basis. The benefits are many if you are regularly procuring and exporting parts out of China and wants to assure getting the right pricing and a stable and safe supply chain. For a monthly sum, your company gets a base package of services such as price requests, regular communication with your suppliers, order placement handling, export documentation controls, and and evaluation of your supplier base. Read more about the Scandic Procurement Solution.