It’s August, but as I write this, it’s more like the Fourth of July, a big deal to us U.S. citizens. And still I haven’t been able to get all things China out of my head since last time I ranted on how interdependent U.S. co-packers are with their supply chain counterparts there.
My in-depth research (five minutes on the Web) indicated that Chinese people invented paper, movable type, the compass, silk, gunpowder, matches, whiskey, the helicopter rotor and the decimal.
Something else China invented, or at least seems to stock in abundant supply: Patience.
The messages are mixed. On one hand, China’s a lumbering giant ready to dominate the world. This is in keeping with research by Catalyst Corporate Finance that noted how Chinese producers plan to become “the world’s largest packaging producers by the end of 2012.”
In 2001, China’s State Food and Drug Administration formally legalized legalized contract manufacturing, and 2003’s “Regulations on Processing Drug for Export” specifically allowed companies to serve offshore customers. Global demand points to a bigger role for China in industries such as pharma, where global brands outsource biologics and generic work, and contract research organizations tap Chinese partners to reduce costs and navigate local regulations.
But is the lumbering giant also a slumbering giant? Most of the population lives in poverty, and the government’s messages are mixed. Last year’s “Packaging Industry in China” report from Euromonitor International (www.euromonitor.com) said the Chinese government deems packaging a “periphery industry.” Packaging costs can’t exceed 12 percent of final product sales price, and materials can’t exceed three layers. A nod to source-reducing sustainability, yes, but one that can also constrain innovation.
So, China, what’s it gonna be: Rich or poor? Global packaging leader or peripheral player?
If you have answers, specific questions or leads for further research, send them to me me an email with the subject heading: “Packaging in China.” If there’s enough interest, we’ll do our best to bring you some news you can use.