Strong opinions seem to always be circulating about Chinese manufacturers producing products for the American market. These opinions are especially strong during the election season. The process of countries trading with each other in one form or another has been around as long as the countries themselves.
The reality of global trade is much too complicated to fit into a 30 second sound bite on the evening news. The threads of global trade tying countries and the economies of those countries together will, in all likelihood, become even stronger in the future. The G20 Summit being held in China this September 4, 2016 will be examining issues relating to the global economy.
An Overview of the Group of Twenty (G20)
Established in 1999, the goal of the G20 is to promote discussions between 20 major economies (actually consisting of 19 countries and the European Union) on matters affecting the global economy. Meetings between the 20 members are normally held once a year and are attended by the leaders of the 20 members. The G20 meetings have no permanent chair. The chair rotates among the members. The nation hosting the summit has the opportunity to lead discussions and set the agenda. One of the major topics this year is expected to be the United Kingdom’s decision to exit the European Union (Brexit) and what possible impact that may have on the world’s economy.
China to Order a Hiatus for Manufacturing Plants Prior to the G20 Summit
The G20 summit will take place in Hangzhou China beginning on September 4th, 2016. Hangzhou is near Ningbo and Shanghai. Being the first G20 summit to be held in China, the country is, understandably, striving to put its best foot forward. As part of this effort, beginning in June and lasting to mid-September, it is estimated that 1,000 factories are expected to close or have their production severely reduced as part of a clean air campaign.
Factories will be shut down or production severely limited in the Hangzhou, Shanghai, and Ningbo areas beginning in June and continue through mid-September prior to the September G20 summit. These three cities together make up one of the world’s major industrial areas.
This hiatus of China manufacturing will dramatically affect the production of polyester, steel, coking, cement, and chemical fibers. The planned shutdowns will result in a tremendous reduction in production including an estimated:
- 5 million tons of polyester
- 1.2 million tons of polyurethanes
- 1.2 million tons of propylene
- Unknown quantities of PVC, acrylic, styrene, and other plastic resins
- Refineries will be operating at greatly reduced capacities
Not surprisingly supply chain disruptions are expected as a result of these factory closures affecting both raw materials and finished products. Advance planning is essential.
In the event you haven’t done so already we highly recommend you speak with your China supply chain partners to learn what possible impact these factory closures may have on your company.
ITI – Experts in Timely Deliveries of Chinese Goods to U.S. Customers
This is the first G20 summit to be held in China. There are a variety of events that happen in China each year that result in China manufacturing slowing or shutting down for a time. ITI routinely consults with its customers ahead of time to strategize the best course of action to ensure an uninterrupted supply of product.
ITI Manufacturing has the experience and expertise with all phases of custom and contract manufacturing. We have both American and native Chinese full-time experts. We deal on a daily basis with the complexities of China manufacturing. We manage these challenges effectively and professionally. Contact us today to discuss your unique situation with us to put ITI to work for you.