| Page 3 of 3 < |
China's Outsourcing Appeal Dimming
|
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
Last month, he began hiring the first of what he hopes will be 50 new workers in the United States.
Kazazian is working on a plan to cut overall production in China of all his products -- tents, backpacks, folding chairs, tarps, apparel -- from 80 percent at the beginning of this year to 20 percent by the next. Meanwhile, at Sun's factory in China, more than 80 of his 400 employees are being laid off. Rows of sewing machine stations are empty as a skeleton crew works to produce the last batches of Disney-branded sleeping bags before the operation is shut down.
There are purple bags bearing Hannah Montana's image and pink ones featuring Snow White and the Little Mermaid. Camouflage for the boys.
Sun, now the general manager, said he knows there's more trouble ahead.
"This is not just my problem. This is a problem for all of China," he said.
The Chinese economy still ranks among the 20 fastest-growing in the world, even though it has had four straight quarters of decelerating growth. Industry groups in China say tens of thousands of manufacturing companies have shut down in recent months. Official statistics show that from January to May, the growth of labor-intensive exports fell to 16.7 percent, from 29.6 percent the year before.
Morgan Stanley's Jen said that in the short term, high oil prices are "clearly a negative shock to Asia," but that in the long term, they could help China achieve its goal of producing more high-tech goods and becoming more of a service economy.
Sun said he is scrambling to learn how to make more complicated, higher-value products that will be more difficult to produce elsewhere. He's working with Kazazian on a new line of life vests that will be sold in the United States.
He doesn't need to do any complicated accounting to confirm that the vests will be more profitable than the sleeping bags. He just needs to eyeball them. For every sleeping bag that can fit inside a U.S.-bound container, there's room for three or four children's life vests.
