Export
Issue No. 57 - February/March 2011
Rising risks of Chinese manufacturing
by Nathan Gray
Consider the Risks before developing your future International Manufacturing Strategy
South Australian manufacturers are facing high costs of production, and a high A$ near parity with the US$, which has resulted in a loss of competitiveness in international markets. If manufacturers are to survive in SA, they need to address the cost of production and regain international markets.
It is not in SA’s long term Interest to have the manufacturing sector just get up and leave: companies have developed years of knowledge and expertise, and in many cases have created substantial intellectual property invested in manufacturing in South Australia.
Manufacturers planning for the future need to consider how to effectively manage the international markets in which they will manufacture. Addressing the cost pressures and protecting intellectual property will also be fundamental to developing a sustainable and effective international manufacturing strategy.
Since Australia can no longer compete in low-cost manufacturing with other countries in our region such as China due to our comparative high costs of production, as a consequence many Australian manufacturers have looked to China to answer cost-of-production issues, and moved manufacturing to China in recent years.
This can be a great way to lower production costs, and many Australian companies have managed their Chinese operations successfully, but there are some downside risks to manufacturing in China.
Conside...
