Sourcing from Asian countries has become a cornerstone of many industries and essential for many businesses. Lower production costs, skilled labour, and vast markets make Asia an attractive destination for companies worldwide.
In this blog post, we will explore the complexities of sourcing from Asian countries and, in particular, the relationship between Europe and China.
The profitability of sourcing from Asia
Sourcing from Asian countries presents significant profit potential for European businesses. The region offers a wealth of manufacturing expertise and resources that can take down production costs while maintaining high-quality standards.
With the right network of suppliers and partners, companies can achieve efficiency and high competitiveness.
China in the supply chain
When we discuss sourcing from Asia, China is often front and centre. The country's manufacturing scale and technological advancements have made it a vital player in the global supply chain.
Despite concerns about the political climate, many leading European companies continue to invest in China. This trust is not without reason.
- Manufacturing expertise
China's manufacturing capabilities are exceptional. It has consistently demonstrated the ability to produce goods at scale, offering cost-effective solutions for businesses across various sectors.
- Established infrastructure
China boasts a well-developed infrastructure that supports efficient production and transportation. This infrastructure has attracted major multinational companies, showing China's position as a key player in the global supply chain.
- European political engagement with China
European countries have maintained a strong trade relationship with China despite concerns about the political climate. European politicians and leaders regularly engage in discussions and negotiations with China, emphasizing the importance of the relationship.
- Trade affairs
High-level visits and negotiations between European leaders and Chinese counterparts focus on trade affairs. These interactions seek to address issues related to trade barriers, market access, and intellectual property protection, among others.
- Relationship care
Europe recognizes the significance of maintaining a positive relationship with China, not just for economic reasons but also for political and diplomatic considerations. Both sides understand the benefits of cooperation in addressing global challenges.
Reduce the risk: multi-market sourcing strategy
Sourcing from Asian countries, including China, can be lucrative for companies. It must be approached with caution and a well-established network of reliable partners though.
Despite concerns about the political climate, the economic opportunities and expertise continue to attract businesses from Europe and around the world.
The relationship between Europe and China reflects a pragmatic approach to international trade. While challenges may arise, the mutual benefits of this partnership ensure that the economic ties between these two regions remain strong.
To reduce the risk you should consider sourcing from more than one country. This will not only spread the risk but also offer you advantages regarding quality and price. Learn all about the multimarket sourcing strategy here.