When I saw the headline \u201cThe Next China Problem To Freak Out About: A Shrinking Labor Pool\u201d on Yahoo Finance, I had to read the associated article. What was even more insightful than the article was the accompanying video. The video described a couple of demographic changes happening in China that may affect you if you source in that country.<\/p>\n
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First, Jeff Matthews, a hedge-fund manager at RAM Partners, described the effect on the workforce of China\u2019s 1978 law that \u201crestricts the number of children married urban couples can have to one\u201d (Wikipedia). A generation after this law has been enacted, we are now starting to see a significantly smaller number of Chinese individuals entering the workforce compared to years past.<\/p>\n
Second, Matthews described infrastructure development in the western part of China that is luring workers away from manufacturing jobs in the \u201cdark, sweaty, noisy, awful [factories] 500 miles from [where workers actually live]\u201d in the southeastern part of China.<\/p>\n
Combined, these factors seem to suggest that China is not what it used to be from a sourcing perspective. So, where should one source? Is there another country ready to take China\u2019s place as the go-to place for low cost country sourcing?<\/p>\n
Matthews says \u201cVietnam has only 80 million people\u2026Vietnam alone is not the answer. India has a horrible infrastructure, that\u2019s not the answer right now\u2026One way [companies will source in the near future] is \u2018spreading it around\u2019: a plant in Vietnam, a plant in, say, Czech Republic\u2026a plant in Latin America\u2026[The macro-economic change that affects global sourcing choices] probably lifts manufacturing worldwide, instead of sucking it all into China.\u201d<\/p>\n
Interesting food for thought. So, if there is a labor shortage in China, where will you move your orders to?<\/p>\n","protected":false},"excerpt":{"rendered":"
When I saw the headline \u201cThe Next China Problem To […]<\/p>\n","protected":false},"author":12,"featured_media":4046,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2913","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-procurement"],"yoast_head":"\n