Parcel - June 2008 - (Page 22)

management HOW LONG WILL THE EAST-WEST TRADE IMBALANCE LAST? There are a multitude of factors that could inﬂuence the outcome veryone knows there’s an East-West trade imbalance, and if you don’t, well, you probably haven’t been paying attention. But the more pressing question is: How long is it going to last? Well, that depends on a variety of things — speciﬁcally, the fact that Asian manufacturers are now competing on higher quality as well as low cost. Here, we take a look at what that means for you. Manufacturers in low-cost countries becoming more and more capable China’s competitive advantage in technologically advanced manufacturing has improved dramatically between 1987 and 2005, according to a study by the University of London. Using a metric that reﬂects the proportion of exports of a single good compared to the exports of all goods, China’s advantage has become surprisingly strong in high tech. It exported 2.2 times more high-tech goods than regular goods, as a share of world consumption in 2004. Strategic industries in China have especially high ratings. These industries are already competitive on a global scale and capable of reliably delivering good quality in industries such as consumer electronics, ofﬁce machines, computers, instruments and telecommunications equipment. With time, today’s low-cost countries will join the ranks of the developed nations. “Chinese companies will do the same thing that the Japanese did,” says the executive director of a major 22 May 2008 automotive distributor, referring to Toyota, Nissan and other Japanese carmakers’ migration path in the US auto market. Asian governments are establishing pro-Western foreign investment institutions and frameworks China joined the World Trade Organization (WTO) in 2002 and recently instituted labor regulations and restrictions on pollution. The bureaucrats are well aware of the importance of the impact that such legislation and institution has on its ability to attract Western manufacturers. In fact, serving the off-shoring wave has become an industry in itself! • Vietnam is working hard to foster a receptive environment for manufacturing. Its approach is to protect intellectual property rights and offer tax breaks. • China and other nations are using joint-venture legislation to ensure that local partners acquire the intellectual property in business ventures over time. • China is stimulating creativity amongst its youth, which includes the establishment of an advertising and graphic arts social effort. “Design is one of the most popular majors at Chinese universities today, and hundreds of design consulting ﬁrms have sprung up in Shanghai, Beijing and Guangzhou,” according to BusinessWeek. “Design is the way companies improve their competitiveness,” says a vicepresident who oversees design at a major appliance maker. These policies seem to be working. Asian countries are receiving billions of dollars of foreign direct investment, and China tops the list of total inﬂows of foreign direct investment. Asian logistics infrastructure is getting even better Many of the developing countries are making massive investments in both physical infrastructure and intellectual and www.PARCELindustry.com E By David Jacoby http://www.PARCELindustry.com

Table of Contents Feed for the Digital Edition of Parcel - June 2008

Parcel - June 2008 Contents Editor's Note What Would Augello Say? Success Means Never Being Satisfied Moving from Manual to Automated Fulfillment Regional Carriers Move to the Forefront Understanding Warehouse Management Systems Negotiating Carrier Contracts It’s All About the Data! How Long Will The East-West Trade Imbalance Last? Educate the Shipper, or Fix the Software? Product Profile On the Mark New Products & Services Advertiser Index Wrap Up

Parcel - June 2008

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