Japanese business delegation visits China

Japan, Japan, Japan. How many times did I call your name "3" There is a Big market for you in Africa. China knows this fact. Why holding meetings with an enemy? look elsewhere.. China is also pushing to Africa namely Nigeria, ghana etc. Your products are highly valued though expensive but people are also getting to understand the savings in quality rather than quantity. Be warned!!!

Japan, Japan, Japan. China is your largest trading partner. Some people still think that means nothing. You know full well that you can’t get into African markets otherwise you would have done it long time ago. How come everybody shows interest in Africa after China steps her foot in it? You know the terms, “struck in the middle,” your image of high quality is no longer the case. Korean products have been perceived to have equal or even better quality than Japanese products. Coupled with the high prices, and you’ll find yourself in the no man land. Improving your image in the Chinese markets should be your first priority.

You need a combination of strong and affordable labor market, infrastructure and government stability to be attractive for Japanese manufacturers. However, in less than five years, labor costs in China will get so high that many industries will reach a tipping point, and decide to move some or most of their Chinese manufacturing operations over to Vietnam and other Southeast Asian countries. The logistics in planning to move factories to other location is a major task and they require substantial lead time. There are some manufacturing exodus from China is already underway.

There are a lot of other factors to consider in relocation, such as capital investments, learning curve, freight costs, local taxes, customs duties, exchange rates, governmental requirements, incentive programs, and cultures. Yes, labor costs in China will be higher but that doesn’t mean it will be extremely higher taking into account the other factors. But, in fact, China has already switched its focus from manufacturing to service industry, and from export driven to consumer driven economy to smooth out the process and maintain growth.

However, in less than five years, labor costs in China will get so high that many industries will reach a tipping point, and decide to move some or most of their Chinese manufacturing operations over to Vietnam and other Southeast Asian countries.

Low end manufacturing goods such as toys, textile and shoes have already moved to Bangladesh, Myanmar, Indonesia and Fiji. However I do not mind about paying higher labor cost if there are more productivities. For example, one factory cleaner from East coast of China is more expensive than three factory cleaners from Bangladesh. When I compare the productivity, one cleaner from east coast of China is more productive than three cleaners from Bangladesh.

If that cleaner can still maintain his speed, efficiency and quality of cleanses have no point for moving to other nations. Singapore and Taiwan are even more expensive than China. However their engineers are better than China. They are more comfortable with Chinese workers. Labor cost is not everything for profitability of business.

There are some manufacturing exodus from China is already underway.

It is true for low end goods. For high end manufacturing goods such as telecommunication, automotive and solar energy cells making are can not be trained within a few weeks. It is highly knowledge incentive and precise. It will take many and many years for exodus of that products. Rome was not built in a day.