- 06 September 2006 -
China Remains at the Forefront of Finishers' Minds
By Greg Valero, Publisher

We're nearly three-quarters of the way through 2006 and, by all accounts, this has been a good year for the metal finishing industry. Traditional economic indicators are holding steady, raw material and energy prices continue to fluctuate, but not nearly at the levels previously seen, and a spot survey of surface finishing raw materials and equipment providers indicates most companies' customer bases remain largely intact despite increasing challenges from off-shore competition.

That is not to say the competitive situation involving China, in particular, is going away anytime soon. Industry continues to call for policy changes that will help U.S. manufacturing remain viable in an increasingly competitive global market. An ongoing issue is U.S. trade agreements, which are said to have contributed to a dramatic increase in Chinese imports and loss of U.S. manufacturing jobs.

While China remains very much a hot topic of conversation, I don't sense the same level of emotion and energy compared to, say, two years ago. I think this is because the circumstances are somewhat different. For starters, the state of the U.S. economy is better. Surface finishers appear to have come to grips with the realization that China is not going away. During this time, they have taken big steps to figure out how to do business better, faster, and cheaper.

Granted, there is still a long way to go as it relates to leveling the playing field. Current domestic and international trade policies continue to negatively impact U.S. manufacturing, and increased foreign investment in manufacturing in Asia continues. Trade associations, among others, continue to urge the Bush administration to enforce polices under the World Trade Organization (WTO) to correct the manipulation, as well as under-valuation, of China’s currency; enforce China's commitments to the WTO on such issues as subsidies, intellectual property rights, and market access; and enact legislation that renews and grows the U.S. manufacturing base.

The multi-million-dollar question is how surface finishers can maintain a healthy manufacturing base. It is also not impossible for U.S. manufacturing to rebound, as the sector witnessed growth from 1983 to 1993 when it added jobs, so history proves that things can turn around. In fact, a turnaround may already be underway. Nearly every industry member we talk to says they are looking at ways to save money, identify growth opportunities, and implement plans to boost sales. One industry member I spoke to summed it up best: "The world turns every 24 hours. I don’t think we are going to stop the turning."