How Will Overseas Manufacturing Be Affected?
If there is anything that will influence overseas manufacturing, it will be this: Earlier this year, China informed the World Trade Organization of their plans to bring an end to certain portions of its long-running foreign trash importation industry. As of December 31, 2017, the world’s leading importer of recyclable waste will be closing its ports to several incoming waste materials. Initial shock waves from this decision are being felt on a global scale, and analysts are quick to expect the impact to wreak far greater havoc on the overseas manufacturing sector during the years to come.
The Ban Briefly Explained
According to officials, China’s halt to foreign recyclable waste imports applies to paper, fabrics, plastics and several other material categories. This decision is a result of high levels of pollutants found in such products making their way into the country’s supply chain. Therefore, China will focus on domestic recyclable waste.
Although much of the East Asian nation welcomes this news, a wide range of problems lie on the horizon. Chinese companies involved in the use of recyclable imports – as well as those charged with the task of making them ready for manufacturing purposes – are being forced to look inward for resources. This is a matter they find themselves ill-equipped to handle.
At the same time, many of these businesses will be taking a considerable financial hit. Significant portions of would-be profits will now be allotted to the development of new techniques and technology geared toward improving the material refinement processes. China’s efforts to “go green” apply to its own products, as well as those on the outside.
As China looks to its own solid waste products in an effort to control environmental degradation, other nations across the globe are being forced to do the same. Hong Kong in particular has already become overrun with waste paper that would have been bound for China. Plastics are likewise piling up in countries previously dependent on export agreements.
One ripple effect is China’s costs for finished paper products have doubled thus far with overseas manufacturing companies already experiencing a 25 percent uptick in corrugated cardboard and other paper-based materials.
Chairperson Cheung Yan of Nine Dragons Paper Holdings, a leading Chinese producer of paper products, recently told the press that labor costs are also on an upward trend. No doubt these increases will ultimately find their way to the consumer.
Speculation regarding a surge in shipping lane fares is also circulating. As imports once sent to China are rerouted to new destinations, other oceanic byways are expected to grow quite a bit more crowded. Once demand for space intensifies, related expenses are projected to follow suit.
Despite the presently occurring repercussions of China’s ban on foreign trash imports and its projected outcomes, it’s interesting to note this is not the first time China has said it will cease importing recyclable materials.
China announced similar intentions a few years ago that caused price surges, yet the country soon lost its enthusiasm for upholding those proposed outlines. Before long import status returned to its former state and the potential crisis was averted.
However, Chinese officials affirm steadily declining water, soil and air quality have strengthened their resolve on this matter. Should the ban proceed and be sustained as expected the overseas manufacturing industry could be facing rising costs, changing supply chains, as well as unforeseen issues.
It is interesting to note that there are some who see this move as a good turn of events that will help improve recycling operations here in the USA. No matter what finally comes from this decision, the overall process will be interesting to watch.
How ITI Manufacturing Can Help
ITI Manufacturing has helped customers through changes in the international overseas manufacturing arena for over 40 years. Whenever challenges have presented themselves, ITI has been there to help sort them out and find the best and most sustainable methods of continuing to find ways to help our customers remain competitive. This is due to our deep knowledge, long-standing, and established relationships with high-quality Chinese manufacturers with whom we have developed loyal business relationships.
At ITI Manufacturing, we constantly strategize through the stumbling blocks to find viable solutions that will work in our customer’s best interest. If you are not successful, we are not successful. Interested in experiencing a true overseas manufacturing partnership? Take the first step by contacting one of our experts toll-free at 888-574-6823.