Supply Chain and New Economy in China GMC

By Anjali Bhatia, WG’15

GMC China Factory Visit
Luen Thai factory floor

The “Made in China” tagline has soared through the last two and a half decades. From 1990 to 2015, China has gone from producing fewer than 3% of global manufacturing by value to nearly 25%. By the mid 1990’s, China’s total exports totaled to around 60%, and it quickly earned itself the reputation of being the low-cost manufacturer. U.S. companies jumped on the bandwagon, completely transforming their supply chain so that they could take advantage of the lower labor costs of China. Now, most low-cost labor is shifting its way towards other Asian countries including Burma, Vietnam and Bangladesh. I did the China Supply Chain GMC to understand the changing economy – how is China transitioning away from manufacturing?

Throughout our path from Shanghai to Shenzhen to Hong Kong, we heard from different companies and speakers that China hopes to also follow the path of production to innovation. One example of a company we visited was Luen Thai, who manufactures apparel for companies such as Ralph Lauren and Uniqlo. While they used to produce predominantly in China, they now have shifted their focus to opening and investing in factories in South East Asia.

GMC China
Marketing to the Chinese Consumer students

We were also able to visit the “new economy” such as Yihaodian, a grocery ecommerce startup that is now partially owned by Walmart. The office had a Silicon-valley vibe with exercise machines in a bright office and large posters up of inspirational thinkers such as Steve Jobs and Albert Einstein. This helped paint a picture of how startups are broadening the landscape of the Chinese economy.