This is the outline of a presentation that I give at each Global Sources China Sourcing Show entitled: Smart Steps for Effective Sourcing in Tough Economic Times . It’s both an introduction to the current factory situation in China and a review of the list of options for financing in China today.

David Dayton on 'Smart Steps for Effective Sourcing in Tough Economic Times' Know your market

  1. Exports have dropped up to 60% in many industries.
  2. Imports have dropped even more. There are a lot of reports saying that buying is up this year but it’s not consistent across all industries (asset heavy) nor all regions.
  3. Chinese factories have been stiffed for payments and canceled orders by foreign companies don’t go into China with the attitude that “hey, they should trust me, I’m from the developed country, I’m the one that doesn’t trust you.” The roles have been reversed. Dramatically.
  4. China says it will hit 8%, no one else believes it. No one. Think more like 5.5% to 6%.
  5. Chinese banks and governments are offering incentives and loans. The question is whether or not you(r supplier) can get any of it.
  6. Bad economy in China has lead to consolidation, which is not a bad thing. Lots of smaller, borderline quality factories have gone out of business. Big factories have more resources.



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