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Chinese Workers Impact Promotional Products Trade

Promotional Products Business reports that a shift in the number of Chinese workers, along with laws supporting better working conditions and wages, is having an effect on the promotional products industry which imports many products from China.

The changing labor picture emboldened some Chinese autoworkers to strike recently in Zhongshan, while other factories are operating with labor shortages of 15 to 20 percent, according to The New York Times.

A leading watch supplier reports "We are seeing lead times go from 45 to 75 days".  He adds"My suppliers are getting slower and more expensive.  It's really changing the game with us on the fly."

The NYT reported that the supply of workers ages 16 to 24 has peaked and will drop by a third in the next 12 years because of stringent family-planning policies.

Also, a strong earthquake in 2008 and a major snowstorm that left thousands stranded over Chinese New Year earlier that year caused Chinese workers to rethink being so far away from home the supplier says.

Another supplier reports "All of this is leading to factories shifting from Chinese coastlines to the interior".  He continues" one of the biggest things people are not recognizing as much is the redistribution of labor.  More and more workers are finding jobs within 100 kilometers of their home."

The supplier says he doesn't think the recent strikes in big-ticket item factories will have a direct, immediate effect on the smaller factories that generally supply the promotional products industry-unless the workers succeed in getting higher wages or benefits. "There could be a trickle-down effect," he says.

He feels the economic shift to China's interior should be relatively easy for the more low-tech factories that tend to serve most of the promotional products industry.

"Our molded products and sewing factories are easy to move and set up closer to where you want to develop a workforce," he says. "And they are moving."

The supplier says he's going to China to potentially shop for a new supplier.

"We've been working with two suppliers since the 1990s," he says. "I prefer to work it out with them, But we have to sit down and talk about the problems and come up with a plan."

Looking for alternative suppliers is a sound business strategy in China today he says.

"If a company is having supplier labor problems, it probably hasn't changed vendors or the location of its vendors in many years," he says.  He recommends looking at suppliers emerging in the Chinese interior.

"Everyone is alway asking,"Where is the next China?" he says.  "there is no next China.  The question is: Where is the next ShenZhen?"(ShenZhen was the first special economic zone in China.
Thanks to Promotional Products Business Magazine.