Lighting and the economy 4

Singapore 5th July 2010

Now here is something really interesting! We all know China as being the factory of the world. Cheap labor has over the years drawn thousands of companies to start up manufacturing facilities in the main land to then re-export their products for a “healthier” profit margin back into the rest of the world. At first many western companies doing so did not want you to know it was produced in China as people would shun the products fearing quality failure. In fact many china made products were still labeled made in “Europe”. It is well known that many European lighting manufactures have the majority their light fittings produced in China or other parts of Asia. More recently this has become a strategic advantage as many clients wish to purchase “locally” giving the European companies with production facilities in China an edge over overseas import. The perceived local availability and service support playing a role as well.   

Today I read under the headline “Chinese companies outsourcing in France” that the Chinese are setting up a Chinese Business District in the French city of Chateauroux, just south of Paris. Coined as “reversed outsourcing” the Chinese have signed a deal for about 30-50 electronic and light manufacturing companies to start assembling their final products in France. There are a number of good reasons for the Chinese to do so. First of all the rising Chinese currency, the Yuan, is slowly eroding the advantages of the low cost labor. Secondly by locating the final assembly of the products inside the European end market it can also circumvent rising protectionism. Last but not least it can now slap a label “Made in France” or “Made in Europe” on their products adding a valuable quality perception to their products!  

Globalisation in full action… In China we have foreign owners, Chinese workers. Now in France we have Chinese owners and French workers…How that will affect the lighting manufacturing industry I don’t know, but it is safe to say that the world is now a global platform with players from everywhere manufacturing and assembling anywhere…

05. July 2010 by Martin Klaasen
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