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Has Your China Manufacturer Been Seized Today?

By Dan Harris and Steve Dickinson

A loyal reader just emailed me an Outside Blog post regarding a China government decision that will have immediate ramifications for certain companies and should give at least some other companies a little pause. The post is entitled, "China Seizes Control Of Tent Manufacturers For Quake Aid," and it is on how "the Chinese government has seized control of all Chinese-owned tent factories and existing stock" to aid in earthquake relief. According to the post, Chinese army soldiers will be "on factory floors for at least a month, maybe more." The post goes on to note that this "move may have some effect on US suppliers gearing up for the outdoor season, and could bottleneck production into the spring of 2009." This sort of seizure is yet another contingency of which some manufacturers should be aware. Many countries have laws allowing their governments to commandeer (I am running this post just so I can use that word) certain critical assets during emergencies or time of war (for example, US law provides for civilian maritime vessels to be taken for government use during war) and I would think it is the rare company that ever considers this. I am not saying every company needs to consider the possibility of China's government taking over their factory or supplier tomorrow, but this is just one more thing at least certain companies should put into their supply chain risk mitigation plans/strategies.

Full post as published by China Law Blog on July 25, 2008 (boomark / email).