In one of our recent cases, we heard very interesting off-the-cuff commentary from one of the parties, who essentially said the following. Chinese companies up until now were satisfied to handle manufacturing for their customers in foreign countries, and their customers would take care of “front office” functions such as sales and marketing for their products. However, due to the maturation of the Chinese companies, and inevitable changes in the Chinese economy, Chinese companies are getting more and more interested in getting involved in front office functions. Soon it will be common for Chinese companies to set up US operations and handle both the manufacturing and the sales and marketing. What this will mean for US manufacturing operations remains to be seen but it can’t be good.
A recent Financial Times article weighs in on changes in the Chinese economy that will accelerate the above.
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