China Manufacturing: on Brink of Collapse?

Ah the winds of change. Seems nothing is more constant than change, right? Well they seem to be blowing in from the east these days, the Far East, as in China. On the eve of the 2008 Olympic Games, there is trouble afoot and I don’t mean the smog, I mean Chinese manufacturing.

China is experiencing a triple witching that is threatening to ruin the stronghold in the manufacturing sector that that country has enjoyed for the last twenty years. Ever increasing labor costs, outrageous energy costs, and production quality issues have sounded the early warning sirens around the globe that now maybe a good time to look for other manufacturing alternatives.

Funny how fickle large multinationals can be when it comes to cheap labor!

Companies and countries alike are taking a second look at their exposure in China. Some are opting for other lower-wage countries like Kazakhstan, Bangladesh, and India while others are choosing to return home to wave the “made in (insert country name) here” flag.

Still others have had to consider pulling out of China because of the negative impact their product liability has caused in their respective countries. Fisher-Price, a division of Mattel for example, was involved in a massive scandal in August 2007 that resulted in the recall of a million toys, including the popular Dora the Explorer and Sesame Street toy lines because the toys may have been coated in a lead-based paint. I doubt the firm has or ever will recover.

While the impact is minimal today, China will soon be forced to deal with the growing concerns of companies seeking to address the rising costs of goods back home. These firms will either continue to drive down costs in China, or relocate to other countries that promise lower operating overhead while providing higher production standards. But no matter what happens in the short term, it’s going to take a while before some country comes along and unseats China from the manufacturing throne they currently occupy.

Saturday Night Dinner & a Movie for July 5th, 2008

We are going to start a new segment here at Blabrmouth.com. It is going to be a Saturday video clip poking fun at the world of business. Not that we don’t do that during the rest of the week, but I thought it would be fun to hear other people do it as well.

Our first Saturday night dinner and a movie is from a fantastic comic who recently past, Mr. George Carlin. George had a great way of looking at specific issues and bringing them to light in an entirely unconventional way.

The clip I am going to play for you today is on topic to say the least. It’s about the environment. As the world seeks alternatives to fossil fuels, high energy costs, skyrocketing food prices, overcrowding, and disease, George has well….an answer to it all! Enjoy!