Pro-Q: Procurement

• What you can (and should) source from China
• Where to search for manufacturers in China
• Doing international procurement
• Changes required in the headquarters
• Alternative procurement scenarios for foreign companies

For purchasing and procurement purposes China can be roughly partitioned in the following regions:

1. Yangtze River Delta (YRD); comprising the two provinces of Zhejiang and Jiangsu and the municipality of Shanghai;
2. Pearl River Delta (PRD); roughly corresponding to Guangdong province and its major cities (Shenzhen, Guangzhou, Dongguan, Zhongshan et al.);
3. Bohai Bay; comprising the North East provinces of Hebei, Liaoning and Shandong, the municipality of Tianjin and the capital, Beijing;
4. Inner China; where only a few selected areas are of interest: the cities of Xian and Chengdu, and the Municipality of Chongqing;

Also consider that on one side:

1. The YRD started as a prominent manufacturing base for the local market and has increasingly expanded to the export market. This area has historically the largest concentration of garment and textile manufacturers. At the same time, both local and foreign manufacturers are increasingly investing in this area in both traditional and high-tech industries making this area one of the richest for procurement opportunities. The area also plays a major role as a port of entry to China (for foreign companies targeting the local market);
2. The PRD was the first area effectively engaging in exportation and the first one to open to foreign investment and is thus one of the most developed. Some of the best suppliers for electronic components and consumer electronic products are located in this region;

Otherwise:

3. The Bohai Bay has been concentrated on a number of industries (heavy industries, oil, automobile, naval), mostly Government-owned and rarely export-oriented (exceptions apply).
4. Inner China is, industrially speaking, a “special choice” where proximity to natural resources, lower than average manufacturing cost, or applicability of special investment policies are priority in the specific project at hand.

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