China has moved from being a low-cost supplier to the center of the global supply chain, a report from IHS Markit, a financial data company, said recently.
The report said that in 2016, for the first time, China was considered a low-cost procurement destination by less than 50 percent of respondents in an annual survey, a significant fall from 2012, when it was 70 percent.
The survey of purchasing directors around the world is part of an annual investigation on the global purchasing business, and is thought to be persuasive and authoritative in the industry.
In recent years, rising living standards and wages have cut China’s appeal to cost-sensitive companies. It is a revolutionary trend for the nation, said John Calverley from Standard Chartered.
According to British newspaper “The Independent”, IHS Markit’s report shows that it is not proper anymore to see China as “the world’s factory”.
Olivier Blanchard, a senior fellow at the Peterson Institute for International Economics, said thanks to its advanced infrastructure, skilled labor and booming innovative factories, China has been deeply involved in the global supply chain.
“If one American factory retreats from China, the whole supply chain may collapse, which is disastrous for American enterprises,” he said.