China and Increasing Foreign Competition

Americans tend to think in terms of “America vs. the rest of the world”.  It is that way when it comes to manufacturing as well.  It seems we primarily think of America manufacturing vs. China manufacturing because that’s what’s frequently in the news.  However, in China, the manufacturing buzz is not China vs. the USA; it is China vs. THEIR foreign competition.  There’s no question that China is a manufacturing giant; what is interesting, however, is that China manufacturers are increasingly keeping a watchful eye on the on-going development of the manufacturing services in other countries. A number of developing nations are working diligently to expand and improve their manufacturing capabilities with the goal of exporting the bulk of their output often in direct competition with China manufacturers.

The “Mighty Five”

The 2016 Global Manufacturing Competitiveness Index (GMCI), published recently by Deloitte Touche Tohmutsu and the US Council on Competitiveness, lists five Asian counties they estimate that, by 2020, could break into the top 15 manufacturing nations in the world.  These nations are being billed as the “MITI-V”, commonly pronounced “Mighty Five”.  This acronym stands for the countries of:

  • Indonesia: resources include oil and gas, tin, copper, and gold. Exports crude oil and gas, appliances, and textiles
  • Vietnam: resources include coal, rare earth metals, and other minerals. Exports crude oil, textiles/garments, and shoes
  • India: resources include metallic minerals. Exports refined oil, jewelry, cars, and rice

Also included in the “Mighty Five” are two developing countries for which manufacturing currently accounts for 75% of their merchandise exports:

  • Malaysia: rich oil, tin, palm oil, and wood. Exports electronic equipment, oil, palm oil, and plastics
  • Thailand: mineral-rich, including coal and tin. Exports rice and other agricultural products.

Developing Nations Counting on Manufacturing

Other developing nations are also counting heavily on manufacturing products for export:

  • Hungary is typical of some of its neighboring countries: it has arable land and forests but lacks energy sources. The country exports machinery and equipment
  • Mexico: rich in oil and gas, silver, gold, copper, zinc and timber; exports oil, silver and a variety of manufactured and agricultural products
  • Pakistan: rich in coal, gas, copper, gold, oil and minerals; exports furniture, textiles, sports goods, cutlery, appliances and agricultural products

Additional nations to watch are the Philippines, Poland, Romania, Sri Lanka, and Turkey.

The USA is Also on the Move

Another interesting part of the 2016 Global Manufacturing Competitiveness Index estimate has the USA, over the next 5 years, becoming, the world’s most competitive manufacturing nation, surpassing China, and Germany in the number 3 position.

Developments will be Interesting

The previously mentioned changes and shifts in the manufacturing world are interesting to be sure.  However, we must remember the GMCI index and its estimates of which countries will do what and what position they will hold 5 years from now are just that – estimates.  It will be interesting to watch as the facts reveal themselves as well as the events that will be molding whatever changes will actually come to pass.

Making the Most of Off Shore Manufacturing

If you can’t or don’t want to wait 5 years to see what the world manufacturing situation will be; if you need to take action now and take advantage of all China manufacturing has to offer, you should connect with ITI Manufacturing.  As a full-service, custom manufacturing partner we have been assisting American manufacturers for more than 40 years.  We understand the necessity of locating and working with reliable manufacturers while maintaining precise quality control throughout the process to ensure each shipment is exactly what you envisioned it to be.  Developing long-term business relationships is crucial when doing business in China.  ITI has deep roots there.

ITI remains focused on one thing: representing our customers in China.  Our focus is, as it always has been, to “take the worry out of offshore manufacturing” and free up our customers so they can more effectively run their businesses.  No matter the size of the company or what type of product you are looking to source in China, if the time has come for you to investigate China manufacturing, you should contact ITI manufacturing today.

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