China – A Growth Alternative for Manufacturers? A Profit Enhancer?

According to the China Federation of Logistics and Purchasing, its purchasing managers index (PMI) increased last month, marking the eighth straight month this has occurred. Zhang Liquan, an economist with the Development Research Center, said “the survey indicates that China’s exports of goods are likely to pick up in the next few months.” The survey also showed that companies are benefiting from domestic demand.

What does this have to do with the electrical industry here in the U.S.?

While we would prefer that electrical products were manufactured in the U.S., the reality is that many electrical products are made in China. This generates a couple of questions / thoughts:

• If Chinese manufacturing for exports is increasing, which product categories / markets are these products destined for? Could they present growth opportunities in those segments?
• For U.S. manufacturers who contract manufacturing in China, are you prepared? Do you have the right sources?
• Given that the Chinese domestic market is expanding, and giving the amount of territory and number of people, this market is expected to expand for many years (Q3 GDP was 8.9%, up from Q2’s 7.9% and Q4 is projected at 9.5%), should manufacturers and distributors consider entering, or expanding, in the Chinese market?

The first question may represent opportunities for all. The other two get to the issue of helping manufacturers improve their profitability and expand their reach.

Channel Marketing Group, recognizing the opportunity for manufacturers to improve their strategic sourcing, hence becoming more profitable, and the opportunity to expand their distribution networks into Asia recently formed an alliance with East West Associates (read press release here). East West Associates offers an array of services that helps companies better, more profitably, and quickly navigate Asian markets … everything from sourcing selected products to strategic sourcing (contract manufacturing, competitive intelligence, fraud and quality audits) and research and developing Asian market entry strategies (read services here).

If China is growing, how could you benefit?