China’s Leadership Change – World Supply Chain Fright of Blight?

As the biggest BRIC, China is joining the balance of the world in economic shifts with potential, if not certainty, the reconfiguration of multinational inbound and outbound supply chains. Manufacturing hubs are diversifying in product types and production locations, and retail with demand for international products and discretionary income in flux throughout geographic markets.

As Xi Jinping becomes the country’s party general secretary, he brings to the position a mix of capitalist capabilities and Maoist Marxism. How these ideologies balance under his leadership will mark China’s economic near-future, as well as with those engaged in commerce with the nation. Factor potentially lingering trade deficits, countries positioning to be attractive alternatives for lowest-cost manufacturing, and citizenry indoctrinated with Western wares, and China’s world trade complexity could alter dramatically.

The rubs: they’ll face economic growth of 7 percent in 2013, the least in 23 years, according to fixed income fund giant PIMCO. Standard Chartered Plc sees a risk of annual growth slumping 3-4 percent within 10 to 15 years without market-driven change to introduce more competition for state enterprises. They face the litany other developing nations endure:  an industrial workforce reliant on migrant labor, a wealth gap to potential social unrest, a rapidly aging population, a legacy of industrial pollution, widespread corruption and an escalation in territorial disputes with neighboring nations.

These internal issues they’ll have to work out internally. The rest of the (global trade) world is in the balance. Scary stuff – dependency on China can’t easily be kicked. Without their economic cooperative participation, or suitable substitute(s), there’s legitimate fright of international blight.

On to happier outlooks: it’s out of our hands, and there’s comfort in that realization. We can focus on our own trade’s economies, reducing unnecessary supply chain costs wherever shipments originate or designate. That Data2Logistics can help you control.