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    1. Neil is offline

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      #1

      Moving business to China - why do so many businessmen do it

      Why do so many people move their business to China? What are the main advantages? Can this be a good plan for the future?
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    2. Tommy's Avatar
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      A lot of business owners are thinking to move their businesses to China because of their economic growth over the past few years.

      This can be very good for a business. However, there are some factors you need to keep in mind before taking this important step. While China is one of the biggest economies in the world, the average income is around 100th. Business owners should set up a plan and goal. For example they can choose to achieve success in the domestic market from China. Another possibility is to take advantage of the cheap labor. Here some good reasons for business owners to move their business to China:

      1. To have better access to western customers

      These business owners want to benefit by selling more products to western clients. Their main goal is not to set up their business in China. They are ready to follow their customers wherever they choose to move. Some of the best regions for export are:

      • Pearl River Delta
      • Yangtze River Delta
      • Zhe Jiang province
      • Tianjin and Beijing area

      2. To have lower labor costs

      The low labor cost is one of the main reasons why people choose to move their business to China. The wage in China is around $1 per hour. In U.S. business owners have to pay at least $7.25 per hour. This will also help them to cut the manufacturing costs. Usually business owners choose to sell their products in other countries.

      3. To compete with their business in the domestic market

      Another reason for moving their businesses to China is for competing in the domestic market. Their goal is to use their brand names in order to earn profit.

      4. For the lower labor costs and for competing in the domestic market

      Some business owners chose to move to China because of the low cost labor and to compete on the domestic market. In this case they create their products and sell them in China.
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    3. Thank you for this post:

      Surlink (29 Jun 2012)

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      #3
      Are the logistics costs as low as the lobor costs?

    5. Thank you for this post:

      feichangduo (21 Nov 2011)

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      #4
      Unfortunately the logistics costs in China are very high. This is one of the main problems for people who choose to move their business to China. In order to achieve success people need to make a good business plan and do their research.

    7. energirian is offline

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      #5
      Yeah, plan your business before move here. China is a great place for sourcing of Electronics, Gifts, Clothes, and a great place if you have something that we do not have. I know some international businesses which do Sourcing for sales in their own country, IT consultant, Designer of industrial and consumer merchandise, Financial services...

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      #6
      it depends on your products, for example LED, clothes, shoes, these products can be a good deal.

    9. Mike Liu is offline

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      #7
      Mainly factor is our best quality and reasonable price in China

    10. snowbootswholesaler is offline

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      #8
      the most import factor is the low labor price in China which result in the low prices of goods, especially in labor intensive industry like clothing, textile.

    11. displayonacrylic is offline

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      #9
      Exactly , I agree with tommy's opinion.

    12. RDM Global Sourcing is offline

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      #10
      Hello all,

      Bit about myself first. I am a US citizen who has been living in China for quite some time and own a sourcing company here focusing on K&B.

      I think these days the reasons for moving business to China are many and vary depending on which stage in the business cycle a company is in, their product markets, and their client demographic.

      As many of you know, the days of ultra cheap labor in China are not what they once were. Labor costs have been skyrocketing here and there is a big push to move away from low skilled / cheap manufacturing to higher skilled service sector and R&D. That said, labor costs are still very, very low here and the position of the CNY (although under much pressure from the world / USA) keep exports an engine of growth.

      In the K&B market, labor is still an advantage in many products including vanities, contemporary cabinets, acrylic tubs, and accessories. It should also be said that Chinese quality is not what it once was. The rapid development and growing wealth has lead to domestic consumers requiring much higher quality and producers have responded. That said, material costs for solid wood kitchen cabinetry and US tariffs on aluminum for shower doors present some obstacles for exporters also. Again, kind of depends on the markets. While we are not active in the textile / apparel industry, we have seen a number of these low skilled, low cost labor production markets move south to Vietnam and other places in SE Asia because of the labor costs. In fact, I have actually heard Vietnam described as "China's Mexico" because many Chinese manufacturers are now outsourcing some of there production to there.

      Imports of luxury goods into China also seem to be a fast growing market. While China is still relatively poor on a per capita basis, the sheer number of people and the past 20yrs of booming economies has produced literally millions of millionaires with money to burn. The trick with importing into China is really understanding Chinese tastes and preferences in products, marketing, and advertising. I find these things to be very different from western tastes and preferences and it takes some serious time on the ground to begin to understand how they work. China is also a very, very dynamic country and so what is "in" today may be worthless in a few months.

      All in all, we have found there is still good business in exporting from China and should be for the foreseeable future, but it is very necessary to know the market and to have someone "on the ground" here. It is a maze of opportunities and pitfalls and navigating that from abroad can be daunting at best.

      For anyone interested in importing K&B items from China, please visit our website or contact me directly. You should be able to just google the full name of our company. We have also started a blog on our website meant for K&B import / export professionals to share their advice, experience, and opinions. If there are any K&B pros on here that would like to post, we would welcome your feedback!

      Look forward to hearing from some of you in the future.

    13. Thank you for this post:

      hellen (13 Nov 2011), dawei (10 Jan 2012), helenliu (04 Apr 2012), emma_kinggreat (25 Apr 2012), Surlink (29 Jun 2012)

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