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Economic and political outline Turkey - Santandertrade.com

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Economic context of Turkey: GDP annual change, Government gross debt, inflation, unemployment rate. Turkish Political context: Executive and Legislative power, main political parties, Political Leaders.

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Donald Trump has further dampened expectations of a trade deal with China, saying the current framework makes it "too hard to get done".

"Our Trade Deal with China is moving along nicely, but in the end we will probably have to use a different structure in that this will be too hard to get done and to verify results after completion," he tweeted early on Wednesday.

Trump's comments come one day after he said he was "not satisfied" with the trade talks that have become stressed on the US side by an apparent lack of coordination among administration officials.

According to a New York Times report published on Monday, the strained relationship between the treasury secretary, Steven Mnuchin, and the National Trade Council director, Peter Navarro, devolved into a shouting match in front of Chinese officials on a trip to Beijing earlier this month.

The stock markets reacted further to the president's latest comments, with the Dow Jones dropping 120 points in early trading. In trading on Tuesday, the index dropped 300 points.

Market analyst Capital Economics said in a note that the vague agreement for China to reduce tariffs on US auto imports and to purchase more agricultural and energy products would do little to address underlying trade tensions.

"The deal will have little impact on the bilateral deficit with China and a minimal impact on the overall deficit. Nor does it address long-standing (and increasingly vocal) complaints that many US firms are forced to transfer technologies and cede ownership to Chinese partners in return for market access, which prompted the trade investigation into China in the first place."

Accordingly, the paper concluded, "tensions over trade policy will almost certainly flare up again in the coming months".

Several administration officials were then obliged to walk back optimistic comments that China would agree to cut its trade surplus with the US by $200bn, largely by increasing US imports.
Topics

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Trump says China trade deal is 'too hard to get done'

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Donald Trump has further dampened expectations of a trade deal with China, saying the current framework makes it "too hard to get done". "Our Trade Deal with China is moving along nicely, but in the end we will probably have to use a different structure in that this will be too hard to get done and to verify results after completion," he tweeted early on Wednesday.

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China: clothing production by month 2018 | Statistic

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The graph shows clothing production in China until March 2018. In March 2018, about 5.15 billion meters of clothing had been produced in China.

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Turkey has emerged as a major sourcing hub and in the current business environment with increased emphasis on optimization of company costs by concentrating internally on long-term strategic capabilities; it is obvious that world-wide companies are increasingly depending on products sourced from low cost countries.

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Manufacturing in China has been the synonym for production in Asia for a few decades. However, things are changing. Vietnam, Thailand, Malaysia, India, and Indonesia are all perceived as the "new-China" due to significantly lower wages. But are salaries the most important factor in the decision of where to manufacture? Let's find out by comparing manufacturing in China vs. Vietnam.

1. Wages In Vietnam Are Two Times Lower

In the past 10 years, salaries of factory workers in China have doubled. When manufacturing processes depend on actual labor work, it is more likely production costs will be cut down in Vietnam, not in China. But keep in mind, there is a trend of wages rising across the whole of Southeast Asia.
Score: China - Vietnam 0:1
2. Semi-Complex And Complex Products

While it might be cheaper to manufacture jeans in Vietnam, printing any application on those jeans will put China ahead. Not only is it cheaper, but the experience is on China's side. Not to mention all the other products such as plastics, electronics, printing, packaging, etc. China has decades long experiences in the manufacturing of EVERYTHING. Nobody will beat that at least for another 10 years.
Score: China - Vietnam 1:1
3. Access To Raw Materials

China, by and large, has the advantage in raw materials. First, China has been the world's manufacturing hub for a long time. Second, China is the most attractive consumer market in the world. These two factors alone mean there are massive stocks of all types of raw materials. This makes raw materials both accessible and affordable. Vietnam's manufacturing industry heavily depends on the importation of raw materials. Sometimes, importation costs might prove to be too expensive, and the savings from affordable operations are unable to outweigh those costs.
Score: China - Vietnam 2:1
4. Overall Experience and Hardworking Culture

With a mature manufacturing industry, China has millions of skilled workers and factory managers. These people are raised to become hardworking individuals who all contribute to making their country great again. In fact, only six years ago average labor productivity in Vietnam was only 7% of that in China. This is pretty much the case across all the other countries in Southeast Asia.

Whenever you manufacture a new product, you need to train staff, optimize production lines, etc. Big corporations usually do that themselves by employing manufacturing experts. That's why Samsung or H&M can move manufacturing to Vietnam, or even on Mars if Martians are cheap enough and willing to sew for humans.

If you're just looking for a factory to take care of manufacturing processes themselves, then you will find what are you looking for in China. Yes, many manufacturing horror stories happen in China. But wait awhile for Vietnam and India to get more orders, and then you will also have more horror stories coming from there.
Score: China - Vietnam 3:1
5. Infrastructure

China has developed all types of infrastructure, and they are among the best in the world. In reality, if you need to send a package from the north of China to the south, it will probably be the fastest and most affordable delivery of any given distance in the world. Whether you ship by air, ground, sea, internationally or locally, China is the most competitive in this area.

The railway and highway systems are incredible. China's harbors and trading fleet are huge and busy, which means competitive. Sometimes, international shipping is subsidized by the government. Also worth mentioning are excellent communication and power grid infrastructure. All of the above affect the final price of manufacturing and ultimately, what a factory can or can't make.

It takes time to build such a massive and high-quality infrastructure, and no country will be able to beat that for decades. While Vietnam's infrastructure isn't inadequate, China's is a lot better.

For example, China's widespread across the country bullet trains can reach up to 350 km/h (218 m/h). Officially, Vietnam is planning to achieve that by 2050.
Score: China - Vietnam 4:1
6. Scalability and Options

Most of the Chinese factories can scale production. And even when they can't, just cross the road and enter a factory that can produce whatever is necessary. Sometimes, there are thousands of factories in a single city. They often do the same or similar types of products. Chances are you'll find what you need.

There are always factories willing to work with small, medium and large businesses. As opposed to what most people think, it is fairly easy to find factories willing to manufacture lower quantities here. For anywhere else in the world, a few thousand units is not a big enough order. Factories in other countries have a significantly higher MOQ (Minimum Order Quantity). Vietnam can't keep up with China in this regard. Its population is 15 times smaller.
Score: China - Vietnam 5:1
7. Bureaucracy

While in the past, people had a truly tough time communicating with Chinese factories, things have gotten better now. Most factories have English speaking sales representatives. Their English isn't that great, but they can still get things done.

However, China has three times more restrictive regulations on foreign investments. It is difficult and expensive to navigate through the Chinese legal system. All in all, it is easier to do business in Vietnam if you want to set up your own production line. The entry bar is way lower in Vietnam than compared to China.
Score: China - Vietnam 5:2
Bottom Line

Vietnam is gaining experience in manufacturing and learning. The government does a lot of good things to attract foreign investments and the political situation is stable. Therefore, having Vietnam as an option for manufacturing, especially for clothes, shoes, furniture and industrial machinery is still a good idea.

However, manufacturing equation includes many elements. Vietnam offers some important advantages over China, especially in the low-cost manufacturing. But China is still the central hub for both low and high-end manufacturing. The crown could be taken in the future, but for now, China wins.

Are there some other countries that can compete against China in manufacturing, maybe India, Eastern Europe or some African countries? Share your opinion below.

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Manufacturing: China vs. Vietnam (Pros and Cons)

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Manufacturing in China has been the synonym for production in Asia for a few decades. However, things are changing.

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One of the ironies of our industry - the denim industry - is that we use a lot of water but manufacture our products in places we know don't have water. If you don't believe me, check out this unbiased report from the World Bank.

It identifies which countries have the most freshwater and if water was a primary concern, we'd be making jeans in my home Canadian province of Ontario where there are 400,000 lakes.

Instead, jean factories are in:

1. Los Angeles, where there is drought and recycling water laws are restrictively bizarre.

2. Bangladesh, where the EU provided duty free trade status.

3. Pakistan, where there is .0003% of the water in Canada.

Truth be told, the brands and retailers know there is no water where they make their jeans. They appear not to care because the price of the jean forces them to manufacture in countries with low labour costs regardless of the water supplier. Canadians labourers need too much money per hour to be on anyone's radar. But what happens when water runs out?

I'm not sure how many people know indigo used to come only in powder form. Denim Mills using powder (70% still do) mix their powder up themselves which is messy, irregular (as in shading) and may I say old fashioned as well as water intensive?

Today less than 20% of the denim mills in the world use pre-reduced liquid indigo which is a massively more sustainable way to use indigo. I wonder, who checks if their denim fabric supplier uses powder or indigo? From what I know, not a single mill in Japan has ever used liquid. EVER USED IT! But the question is, does anyone care?

People in our industry seem more keen on talking about organic cotton - which accounts for 1% of the world cotton market - than on the filthy way indigo yarn is dyed and amount of water wasted for no reason.

Advance Denim by Archroma is another dye option that cuts down the use of water enormously. Do any of the mills in countries with no water run only on this dye? No. You'd think if your nation has no long-term water capacity your government might insist (for the benefits of their citizens) on preemptive measures to avoid running out. But nope. Not in Pakistan, not in India, not in Bangladesh, not China etc, etc, etc. The majority of denim mills use powered indigo and not Advanced Denim.

Why is this? Why are countries and cities without water making denim and jeans?

The reason - generally provided by the brands and retailers - is you are the cause. Apparently you, the consumer won't pay for jeans if they are made somewhere that actually has water or you insist on getting jeans from Los Angeles. It seems consumers set high value for Japanese denim made from powdered indigo. It's the consumers that demand everything to be done the way they are being done.

I don't think that's true. I don't think consumers have a clue what's going on with their jeans and were they aware, they would not accept the today's global sourcing and production patterns.
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The denim industry needs to make this big change now

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One of the ironies of our industry - the denim industry - is that we use a lot of water but manufacture our products in places we know don't have water. If you don't believe me, check out this unbiased report from the World Bank.

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What are the relative advantages of China over India, when it comes to sourcing products? The China Law Blog came up with two different posts covering this question... And a reader called Joel Waldman came up with very interesting comments that I am going to reproduce in this post.

From what he wrote, he has been living in India for 30 years and spent all this time sourcing from there. He has started sourcing from Chinese suppliers about 5 years ago.
1. Challenges of sourcing in India
First, here is why he "strongly disagrees that India is in any way, comparable to China":

Logistics is a joke in India. It takes 3 days to unload/load a container ship in Mumbai. I have "lost" containers put on a train in New Delhi which somehow are missing when the train arrives in Mumbai. Yes, containers disappear from trains.

The Mumbai High Court has ruled that proven theft (proven in court) is not sufficient grounds for firing a worker. To close a company/factory with more than 90 workers requires government permission, which has till date, never been given.

India manufactures what China, for a variety of reasons, chooses NOT to manufacture: too labor intensive, too short production runs, primarily for the domestic Indian market where there are tariffs protecting the Indian manufacturer.

The real cost of Indian labor is 2-3 times the cost of China labor when you take into account productivity, Indian workers need for excessive/extensive supervision, and the costs of benefits. This is why Chinese construction companies choose to import Chinese labor to India, for projects they are working on in India, and why, till very recently, there were 40,000+ Chinese workers in India doing construction.

I am fully aware of the problems of sourcing in China. Nevertheless, India's costs and logistics make it the second choice for any product currently available in China.

With the poor response to call centers in India by American consumers/customers, I also expect China to shortly (as English in China becomes more widespread) become the destination of choice for out-sourcing.

These are all strong obstacles to sourcing from (and manufacturing in) India. On these issues, there is no doubt that China offers better options.

I remember visiting a large garment factory in Tirupur (in the Tamil Nadu province). They exported nearly everything to large US and European brands. The workers were paid about 60% of what an equivalent operator would get paid in a Guangdong factory.

BUT they were much slower to do the same job, they were very poorly organized, and their days were much shorter. When I told them that a Chinese sewing girl often worked 11 or 12 hours a day, a manager looked a me and said "are you killing them, or what?"

I can also see a few other reasons why China has been more successful than India for attracting foreign buyers:

Chinese suppliers are good salespeople. They will put a sample in your hands and promise you that's what you will receive. Everything looks easy.

China has set up factories to make about every kind of product, whereas India's industry does not have the same breadth of offer. This "one-stop sourcing" is a huge benefit for buyers trying to optimize their time and find everything they need on one trade show (be it in Hong Kong, Guangzhou, Yiwu...).

For a buyer, going to China is "like going to Las Vegas", as Whit Kelly puts it: good food, nice hotels, plenty of booze and beautiful girls.

2. Advantages of India over China
In a later comment, Mr. Waldman wrote that "there are some good things about sourcing from India":

1. Indian exporters, having been very exposed to Western buyers/culture/business for a very long time, are much more understanding of Western business assumptions: they take their responsibilities more seriously than Chinese exporters. They understand that they are responsible for quality issues, even when a consignment has been inspected by the buyer. They understand that delivery on schedule is critically important, and understand that they need to compensate if a consignment has problems, or is late. This is not generally true of Chinese exporters.

2. They truly understand long term relationships, and are not so focused on the profitability of each consignment. More so than Chinese exporters, in my experience, they focus on the long term.

3. There is not really a cultural or language barrier: yes is yes, and there is a no: a very clear no, when appropriate; not, a maybe/let's see what happens/its possible.

4. There is a greater widespread understanding of their customers' customers: What is acceptable to consumers in different countries in terms of packaging, quality, hidden manufacturing defects, safety issues (lead in paint/trace metals in children toys),

5. Indians, overall, are more creative than Chinese factories. New designs/items are created and plugged into their potential markets. Creativity is real, in India, and they are not looking to copy, but to create something new. IP issues are dealt with in a more "normal" way. Copying is not appreciated. The legal system in India is frustrating slow (I am involved in a property dispute which has been in court for 28 years), but the laws are very similar to English/America laws, which is still not true in China. Contract law works, is enforceable, and predictable. Consumers and businesses are protected from both suppliers, and the government: be they domestic or international.

6. Everyone speaks English, and many, better than I!

7. By and large, exporters say what they mean, and mean what they say.

8. China and Vietnam are the only two countries I know of who try to control which companies can export (through the need for an export license). The original theory that this would insure only quality shipments, has not worked in either China or Vietnam, by the setting up of both state owned and private trading companies. In India, anyone can set up from scratch an export company at a cost of less than USD $ 500. This seems to be a better system, and is ultimately less expensive for the buyer.

9. With all major international banks having branches in India, and very professional Indian banks, international trade is much more efficient than in China. Buying without L.C.'s or a 30% deposit, is much more prevalent in India today, than in China.

This all sounds true... Some of my clients simultaneously source apparel from China and India. I see three types of reasons:

In some cases, if they could, they would buy everything from China, for convenience. But some fabrics and embroideries are just not possible to find in China.

In other cases, it is a "China plus one" strategy (i.e. avoiding to rely on China for 100% of procurements) on the part of the purchasing company.

In rare cases, India has a real cost advantage. However it seems like Bangladesh is the place to go for the "cheapest needle". Pakistan is also an option for some product categories.

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Pros and cons of sourcing products in India vs. China - QualityInspection.org

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What are the relative advantages of China over India, when it comes to sourcing products? The China Law Blog came up with two different posts covering this question... And a reader called Joel Waldman came up with very interesting comments that I am going to reproduce in this post.

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The Pros and Cons of Outsourcing Manufacturing to China - Baysource Global

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We are aware that China is one of those markets that offer the ability of manufacturing an extensive variety of products and at the lowest rates. While outsourcing is an attractive proposition, companies using outsourcing services should be aware of the pros and cons.

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If you are considering setting up or moving your manufacturing operations to China, you are not alone. China is one of the world's biggest manufacturing hubs and a top choice for companies from around the globe. However, many other countries are trying to get in on the manufacturing game. So, how do you know if China is right for your manufacturing needs? This article will briefly lay out the current Chinese manufacturing landscape and explain the pros and cons of manufacturing in China.

Chinese Manufacturing Landscape

China is a huge, diverse country, with many major cities and business centers. Each major city (or region) offers vastly different business and manufacturing opportunities. Each of the cities discussed below is an important business and manufacturing center.

Shanghai is located on China's central coast roughly equidistant from Beijing and Guangzhou. Shanghai is an important economic, financial, trade, and shipping area in China. It is one of the world's largest and busiest ports. The main products manufactured in Shanghai are communication equipment, automobiles, textiles, electronics, steel, chemicals, petrochemicals, and biomedicine.

Beijing is located north of Shanghai at the northern tip of the North China Plain. Beijing is an important manufacturing hub for the pharmaceutical and electronics industries. It is also a leader in bio-engineering and information technology.

Tianjin is located south of Beijing on the west coast of the Bohai Gulf. It is Beijing's sister city and another manufacturing giant. Tianjin is a leader in aerospace and aviation, mobile phones, automobiles, and alternative energy products.

Guangzhou is located in southern China, north of Hong Kong and Macau, on the South China Sea. Guangzhou is the main manufacturing hub of the Pearl River Delta. There are thousands of factories in each of the city's manufacturing zones that manufacture a variety of products.

Shenzhen is located in southern China directly north of Hong Kong on the South China Sea. Shenzhen is known worldwide as an electronics manufacturing hub.

There are many pros and cons of manufacturing in China. Like any business decision, each pro and con should be carefully considered based on your specific company needs, including your product, your budget, quality and quantity needs, etc. Below is a non-exhaustive discussion of considerations each company should make.
Pros of Manufacturing in China
Lower cost: It is often cheaper to manufacture in China. Although you must factor in shipping and duties costs which won't apply if you manufacture domestically, it is still likely cheaper to manufacture in China. Keep in mind, all prices are negotiable, so you can be aggressive in your negotiations.

Better service: Because Chinese manufacturers want your business they will often go out of their way to get it. Remember, service levels may change once you have signed the contract, so your expectations for your ongoing relationship should be clear.

Access to Chinese market: The Chinese market has grown rapidly over the past few years and now represents a huge part of the global consumer market. If you'd like to enter the Chinese market, manufacturing in China will make it easier, faster, and cheaper.
Cons of Manufacturing in China
Intellectual property protection costs: IP protection and enforcement is expensive and high risk in China. Although you likely understand your need to protect your IP in China when you sell your products or services into China, it is also important that you understand that you need to protect your IP from infringements by your manufacturer. You also need to understand the costs and time required to detect and enforce your IP rights in China. Always use an attorney well-versed in Chinese law, which will likely be a local attorney. You can find IP attorneys in the Globig Marketplace under Patent Services and Trademarking .

Higher minimum order requirements: Chinese factories often have lower profit margins, so they tend to have higher minimum order requirements. If your company cannot accommodate high minimums, you may need to manufacture elsewhere. It is likely you will be able to find a factory that is willing to product smaller orders, however the price per unit will likely increase.

Shipping: If you choose to manufacture abroad (anywhere) you will incur the extra costs of shipping, which includes tariffs and duties. You should calculate your total cost, including shipping, tariffs, and duties, when you compare the cost of manufacturing abroad to the cost of manufacturing in-country. Furthermore, the additional time it takes to ship products should be considered.

Stigma: Unfortunately, there is a stigma around products being made in China. Because this stigma is not likely to change, it is something that you will have to learn to live with if you decide to manufacture in China. People buy products manufactured in China every day throughout the world. Some of the world's highest selling brands manufacture their products in China, so don't let this be the deciding factor. Remember, people shop with their wallets before their patriotism.

Choosing where to manufacture is an important, and usually early, business decision that requires a lot of research and consideration. Selecting the wrong factory because you are busy, in a hurry, or don't have the right resources can cost a lot of money and time. The pros and cons discussed above should be considered and given the appropriate weight based on your business and manufacturing needs.

Globig is here to help with your business expansion needs around the world. Join Globig today for free business resources and expertise on China and other countries, and through our Marketplace, access to vetted attorneys and experts around the world.
Related Articles You Might Like: Logistics in China How to Find a Reputable Manufacturer in China Payments Into and Out Of Mainland China
A Quick Guide To Business Etiquette In China

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The Pros and Cons of Manufacturing in China

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If you are considering setting up or moving your manufacturing operations to China, you are not alone. China is one of the world's biggest manufacturing hubs and a top choice for companies from around the globe. However, many other countries are trying to get in on the manufacturing game.