A Surefire way to enjoyed better product margin!
"At the moment, clothing and textile imports from China to the US are allowed to grow at no more than 7.5% a year, under a "safeguard" provision of Beijing's entry into the WTO. "
Source: BBC
This might be old and boring news to most people that are reading this, but what we IXON ASIA would like to bring to your attention is the implication.
What does it means for you? Does this piece of news augment or even add value to you?
Well -the good news is, this piece of news would potentially add great value to you but the bad news is, if only you are fast enough!!
1. First the good news -why does manufacturers not allowed China textiles into US. Because it is cheap!! Because the low cost would rip the more expensive US companies any competitive advantage.
And knowing this, as a rule of thumb, wouldn't alot of other products be cheaper in China. Yes, they are and you can probably enjoyed a very good profit margin due to its low cost.
So, thats the good news.
2. Now the bad news.They are setting quotas. maybe, moving forward even more tariffs on textiles. The government needing votes and support from big companies -would unfortunately but ultimately "design" policies that govern their interest.
Having said that, what has happened to textiles would happened to any other products.
Implications? You as a US citizen would cease to enjoy the low cost of purchasing from China.
There is really no chance of lobbying or battling government policies. But the most important thing to do now, for products
that are still "free to purchase" would be to build relationship with China counterparts.
So that, when the day comes and tariffs and quotas are slap on the products that you are dealing with -you might had found a way to bring it in to the country.
About the author: Heng Chee Leng As a co-founder of Ixon Asia. He writes regularly for business websites and specializes in China trading and business relationship. So, if you would like to learn more from Chee Leng's experience of simply to know more about China cheap production? Visit http:www.ixonasia.com