Business leader offers China insights

Published 12:13 am Tuesday, April 25, 2006

In the words of Southern Cast Products Inc. owner Fred Wile, China is the Big Kahuna when it comes to manufacturing.

And now — thanks to Mississippi Manufacturers Association President and CEO Jay Moon — Wile has a little better understanding of how the world’s largest nation affects manufacturers in Mississippi and throughout America.

Moon visited Southern Cast Products on Monday afternoon to discuss the state of the manufacturing industry in China. The visit was in conjunction with Gov. Haley Barbour’s proclamation of Manufacturing Week in Mississippi.

China “certainly affects the way we do business. Today, high-volume, commodity-type products can be made in China for much less money than in the United States,” Wile said.

“That comes with a price as far as lead times and price and the quality is improving. So a visit like Jay’s helps provide that understanding in that we always hear how good of a producer they are, but now we understand their problems also, and that is interesting.”

Moon’s two-week tour of China took him to Beijing, Shanghai and Hong Kong. He said it revealed the strengths of the nation as well as its numerous weaknesses.

“China has experienced 9 percent economic growth since 1980. Over $1 billion is invested every week in foreign capital. This is why it is developing into a major manufacturing economy,” Moon said.

“They produce 75 percent of the world’s toys, 58 percent of the world’s clothes and 29 percent of the world’s mobile phones. They are the third-largest car market in the world, and by 2008 they will be the third-largest exporter in the world.”

Moon said that while the country produces 1.7 million college graduates a year, China’s education system is based on rote memory with a crippling lack of emphasis on creativity and critical-thinking skills. Additionally, Hong Kong may have 215 million people who migrate from the rural areas into the city every day to work, but the country’s restrictive child-reproduction laws are causing numbers like these to rapidly dwindle.

“They do not have an inexhaustible source of cheap labor,” Moon said.

Moon said the nation’s lax intellectual property regulations are one of the most damaging aspects of the nation’s business practices.

“Any company should assume that its designs and products are being copied,” Moon said.

With this information in hand, Moon hopes to communicate to members of Congress the necessity of putting pressure on China to change the way it conducts business.

“If they are going to operate as a member of the world trade community, then they have got to change things within their economy and the way they do business for there to be comparative processes both there and in the United States,” Moon said.

“On the flip side, it is important for U.S. manufacturers to understand that there is market there that can be competed for. It can be available if the Chinese open the market and allow them in. Manufacturers that have been trying to get into that market have had all sorts of impediments put in their way.

“So what we need to have is an open, fair trading agreement, and if we can be competitive they can be more competitive. But there is a big, big road between there and where we are now.”

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