We
hear lots of complaints about American jobs lost to workers in China
and India. I recently had
occasion to see a silver lining to this
otherwise dark cloud. I was looking for an opportunity for one of my
clients to manufacture a product in China
. He had been told that his
comfort liners for bicycle helmets had to be made in China because that
was where all of the bicycle helmet manufacturers were now located. So
I arranged a meeting for my client with a local Chinese Export/Import
dealer. What I learned at that meeting was an eye-opener.
The dealer said that he couldn’t help my client for two reasons. The first was that he had a different mission, exporting high value American made goods to China.
We often think of the Chinese market as a 1.2 billion low income
customers for inexpensive products, but that is an incomplete and
incorrect view.
The dealer pointed out that the new world of
commerce has created high income Chinese who want to buy products
perceived by them as high value, and to those Chinese those high value
goods are American (and European). The exporter was busily arranging to
export Zweigle’s hot dogs to China.
I said, "Who in China has
ever heard of Zweigle’s white hots?" and he replied, "You would be
surprised how many Chinese either attended or know someone who attended
the University of Rochester." I guess they developed the taste for
Zweigle’s at local picnics. Maybe there is also a market for Buffalo
chicken wings?
The other thing he told me was to forget trying
to convince Chinese bicycle helmet manufacturers to buy American helmet
liners. "These Chinese factories," he said, "are just captive
satellites of the American parent companies. They make what they are
told and compete to be able to supply at the lowest possible price
because the American companies play one of them off against the other.
The American companies that told your client that they had no power
over the manufacturing of their helmets were lying to your client."
All in all it was a very interesting and surprising conversation.

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