China already produces most of the world demand of many commodities: 80% of the total tractors, 60% of the penicillin, 50% of the vitamin C, 70% of the DVD players, 50% of the telephones, 60% of the artificial diamonds, 75% of the world’s watches and 50% of the textiles (China Swiss Survey, 2006).
On the other side, China is present in the high-tech sector with, among others, 74% of the world’s mobile phones. China now makes computer chips, carbon nanotube threads, uses bioengineered crops and is pioneering safer nuclear power technology. China has recently put a man in space and has made significant advances in many areas of research, such as stem-cells.
China is in fact a composite economy (and indeed a composite country, for that matter), at different stages of development in different areas, from the extremely simple economic conditions of the inner and western areas to the very advanced areas of the east coast, such as Shenzhen or Shanghai, allowing for a diversified strategy: high-value production where there is availability of high-end services, human talents, and highly qualified management, and low-tech production where the production costs are lower.
Not least, the growing number of foreign-invested enterprises are putting a positive strain on local suppliers to provide parts at international quality standards.
When deciding about procurement in China and on the strategy forward, you should be familiar with each one of the following issues:
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