Made in China

The global supply chain experienced a dramatic shift when manufacturers moved production to the Far East, particularly in China.

This move was clearly due to the substantial reduction in cost, largely with regard to material and manpower expenses. Ultimately, this repositioning altered the flow of supply chain, signalling the start of the economic phenomenon that is China.

Now, as the consumer public delights on “good buys” and businesses revel on the cut-rate overheads and huge profits, an important question looms: is the bargain of a lifetime that China provides really worth it?

In the late 1970s, when China opened its doors to foreign investment and trade, many companies took advantage of the big market potential that the nation offered, including servicing the world’s largest human populace at the most economical labour rates. However, I believe China’s economic boom further flourished upon its admission to World Trade Organization (WTO) in 2001.

The WTO allowed foreign investors to distribute their goods in China even without entering into alliances with state-owned Chinese partners. This made it more convenient for foreign countries to operate there.

In no time, China became the base of the world’s biggest and most successful companies - from car manufacturers to computer and data-storage solution providers, freight forwarding and transport companies, apparel, food chains, coffee shops, and several others.

In a recent report by Xinhua News Agency, over the past 30 years, when the world economy grew at an average annual pace of 3.3%, China maintained a growth of 9.67% on an annual average.

By 2007, China’s GDP accounted for five percent of the world’s total, up from one percent in 1978. China’s share in global trade also jumped from less than one percent to roughly eight percent in the last three decades.

China’s economic success paved the way to various changes in conducting businesses the world over, particularly in handling and transportation of goods. More importantly, this gave rise to the birth of Hong Kong, Singapore and, of late, Dubai as major global transit hubs that created not only remarkable trading opportunities, but also millions of jobs.

Consequently, to answer market demands, several innovative solutions in the supply chain and logistics industries were introduced as movement of goods from the Far East to the rest of the world became more complex.

For example, the company I established in 1989, Swift Freight International, is credited with having pioneered the multi-modal sea-air combined transport freight business that operates in the UAE.

Our service, SAM, or Sea Air Model, is the most highly regarded logistics solution for businesses from the Far East that pitch products to the African market. SAM shipments travel by sea freight from the Far East to Dubai, where Swift promptly transfers them to Dubai’s international airport.

The shipments are then airfreighted from Dubai to a number of African destinations, using premier airlines.

Clearly, innovative logistics solutions like SAM were born because of the challenges that beset China. And as a freight forwarder that operates and manages six offices in China, I am inclined to notice the glaring logistical problems – such as the poor transportation infrastructure, high toll charges, and shortage in warehouse space, among others.

However, these drawbacks still do not discount the advantages of operating and doing business in China. Except for one major problem, however, which I think is also one of the most critical global concerns at present – pollution.

Developing countries like China, with its over-worked power plants and factories, inevitably produce killer greenhouse gases such as sulphur dioxide and carbon dioxide that are spewed out to the rest of the world.

There is a long-standing joke that everything in the world now is made in China – even the air that we breathe. If that was really the case, would you just stand on the sidelines and watch as the problem become irreversible?

My point is – pollution is too big a problem to be the responsibility of China alone. Everyone is accountable. And as an economic superpower and one of the most influential nations around, it would be impressive to see China take the lead and implement environment-friendly solutions to the pollution plaguing the Earth.

The whole world will follow suit – because the end results of the seriously growing problem of pollution is not an issue with which we can bargain.

Issa Baluch is chairman of Swift Freight International and past president of FIATA. He is the author of Transport Logistics, Past, Present and Predictions (www.transportlogistics.com).

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