@Risk

There’s a growing labor shortage in China, and analysts aren’t exactly sure why.

According to The Wall Street Journal’s blog “China Real Time Report:”

Various domestic media reports put the labor supply gap at around a million people in Guangzhou and neighboring cities such as Dongguan, legendary centers of China’s export boom in the past three decades. Numerous assembly lines and construction sites are sitting idle while anxious employers have raised salaries by more than 30% but still can’t attract enough applicants.

Shen Hong, the author of the post, suggests that at least part of the problem may stem from the fact that new-generation migrant workers aren’t interested in tough basic jobs like construction any more.  The Chinese government has reformed policies and modernized farming to such an extent that rural jobs now compete favorably with work in the city. In addition, second-tier inland cities are experiencing economic booms of their own, and workers may prefer these alternative locations simply because they’re closer to home. Lastly, China’s improved standard of living, in general, means that young workers are less apt to accept the hardships of working in the city, Hong says. (more…)

Are you sourcing chemicals from China?

If so, take a few minutes to read “China sourcing can be a key differentiator,” an article published yesterday at ICIS.com.

Recently, serious problems with quality, purity, safety and delivery have made many companies second- guess their China sourcing strategies. But, in the article, authors Tony Chu and Michel Bulliard contend that companies shouldn’t shy away from sourcing chemicals from China –as long as they use intermediaries capable of handling the wide range of challenges involved.

What are the typical challenges? The authors’ list includes: logistics, cultural differences, tax and regulatory compliance, communication, local and national government rules and regulations, technological capabilities that can vary significantly between chemical producers, and fluctuating economic stability among suppliers.

(Plus, any company that’s sourcing from China also has to deal with the sticky issue of intellectual property, too. According to Chu and Bulliard, “buyer beware” remains the best approach with regard to IP.) (more…)

Granted, most of us don’t realize it, but we’ve all come to depend on a handful of rare earth elements (REEs ) –all of which are vital to a variety of today’s innovative technologies.  For example, lanthanum is a major component of hybrid car batteries. Neodymium is used to manufacture wind turbines. Today’s low-energy light bulbs need terbium. ..

All in all, there are about 20 REEs that are critically important for a wide range of new technologies, and guess where most of these ores are mined? China.

In fact, Chinese mines account for the vast majority (up to 97 percent, by some estimates) of the global supply of REEs.

Sound like a recipe for supply chain trouble to you? It does to me –and even more so now that China may be trying to significantly limit exports of these valuable compounds, as reported over the weekend in The Independent. (more…)

Walmart suppliers in China aren’t meeting the company’s most basic ethical workforce standards, according to a new report from China Labor Watch (CLW).

The report, titled “Walmart Standards Fail, Workers Suffer,” focuses on five suppliers that manufacture goods such as decorations, shoes, tool, paper boxes, and curtains.  CLW investigated these suppliers by conducting external interviews with workers. The group found out that workers in these factories typically endure: (more…)

Last Monday, after nearly a week of talks in Beijing, the US Consumer Product Safety Commission (CPSC)and China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) agreed to increase efforts to boost consumer safety…again. (more…)