International Law

AmCham, Tell Us Something We Don?t Know

By Stan

Foreign companies should view China more as a competitive manufacturing base and as a hub for an Asian growth strategy and less as a low-cost provider of labor and resources, the American Chamber of Commerce in Shanghai said in a latest survey.

It suggested that foreign manufacturers in China develop a strategy to capitalize on the domestic market and reduce dependence on exports. It also advised that investors should develop new business models for the domestic market and tailor existing products to meet local preferences and conditions.

Assuming the above summary from Shanghai Daily is accurate, I have two problems with this:

1. Why is AmCham giving this sort of advice? If a foreign investor wants to set up a local manufacturing operation for export purposes, and that company believes that it is a smart play given market conditions, why shouldn’t they do it?

2. Looking at foreign investment trends over the past ten years as a whole, American companies have already moved from an export strategy to a Chinese market-focused strategy. One would assume that most investors already know this, at least with respect to their particular industries.

To be fair, I should probably read the actual survey before criticizing it, but hey, time is limited.

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Full post as published by China Hearsay on July 28, 2009 (boomark / email).