- 06 January 2006 -
Review & Forecast: China Remains a Formidable Competitor for Surface Finishers
By Kent Dickie, Vice President of Global Marketing, Univertical Corp.
That "great sucking sound" that Ross Perot initially identified as the sound of jobs going South because of NAFTA turns out to have been coming from a different direction: the Far East. I don't think there is a North American company involved with surface finishing, whether it is decorative or functional plating, PCBs or electronics, that hasn't felt some impact of the "China Explosion."
State of the Industry: Where Do We Stand? |
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Even our neighbors to the South have felt the suction. I'm aware of a PCB plant that moved from the U.S. to Mexico a few years back that was never uncrated before being sent to China, and a wheel shop just south of the border scheduled to cross the International Date Line in 2006. I might also add that other places in Asia, like Singapore and Taiwan, that once took business from the U.S. are now seeing some of that business relocate to China.
There a number of reasons for this migration, such as an eager, relatively inexpensive work force (I say relatively inexpensive because those driven by cheap labor are already looking at "cheaper" parts of China and other less expensive countries for doing business), and a government friendly to growth (government-sponsored industrial parks are springing up all over the country with cheap land and tax breaks).
China is a huge potential market for almost everything. The country is trying to accomplish in a few decades what it took the U.S. more than half a century to accomplish.
The potential for consumer consumption is staggering.
One thing that was not mentioned as a reason to relocate production was lenient environmental regulations. While there may be horror stories about old Chinese plants, new factories must meet tough standards. In some areas, there are delays for new plating plants because of environmental concerns and plating "parks" are being developed where all the effluent is handled by a centralized waste treatment facility.
Before we surrender our industry to China, there are few negatives that should be considered. China is a long way from North America, probably four to six weeks by sea. Most factories don't have quality down to the "ship to stock" level; they're getting better, but they are not world class yet. China does not have the same respect for intellectual property rights as does the West; one does not leave the "family jewels" unprotected there.
Review & Forecast compiled by Greg Valero, Editor and Publisher.
