I recently spent a week in mainland China with one of our Partner companies. The experience left me exhilarated, exhausted and more than a little bit concerned over the West’s position in the global economic pecking order.
Growing up in Ireland any goods that we came across that carried the label “Made in China” meant cheap, nasty and mass produced.
Hence prior to travelling I probably had an unfair view that China was fine for high volume production but couldn’t complete with highly skilled precision manufacturing in the West. The truth I found is much more complex.
I was initially amazed by the size of the airport in Guangzhou – a mid-size Chinese city with a population of just 14 million people that is based around 120 km north-northwest of Hong Kong.
There was so much new building going on that the scale was breath taking. I was pleasantly surprised by just how well designed the houses and apartments appeared to be. If anything I think we in Ireland could learn a thing or two from the Chinese sense of style and architecture on display.
I spent time visiting around 15 manufacturing sites in the Guangdong Provence. I hadn’t realised that China has different regional specialisations which means that for a massive country, it is relatively easy to navigate if you want to find the area that specialises in manufacturing toasters or kettles for example…….
I was hugely impressed by the technical knowhow and the “can do” attitude of the people I met. Interestingly the cost of labour accounts for small proportion of the costs of the goods we look at. The Chinese competitive advantage is not built on cheap labour but rather the quality of the supply chain. I spent time in the factories with the owners and key workers and was happy to hear that all the workers benefit from full medical and holidays and feel a genuine part of a community while working there. I did find it strange that many of the factory owners supply accommodation for the workers beside the factory but this is often a necessity when the workers come from so far away.
The Chinese government has recently cut import taxes in an effort to boost domestic consumption. I could see clear evidence of a strong middle class that is driving significant consumer spending in China. These people want Starbucks coffee, KFC for lunch and to wear the latest designer clothes.
Far from seeing a nation of bicycle owners I saw a vast array of new cars on mostly new highways everywhere we went. I was surprised to hear that car financing is readily available and mortgages are available with a 20% deposit.
I found the people I met to be warm and friendly and hugely hospitable. Long term business relationships are as important to the Chinese as they are to the Irish which ensures there is always a warm welcome.
I will most certainly be back.