(March 19, 2007) — Several China experts — Americans who lived in China for decades — echoed a core element of the Chinese mind-set at the Plastics News China Forum last November: “Nothing is impossible.”
I grew up in China, but I think my parents' generation, which is still steering China's economy, has a better understanding of that. They witnessed the chaotic “Great Leap Forward” from 1958-61, which modeled economic policies of the former USSR; survived the disastrous famine following the “catch up with the U.K. and surpass the U.S.” campaign; helplessly missed higher education during the Cultural Revolution of 1966-76, instead working on farms and in factories thousands of miles from their hometowns.
Then, they were thrown into the reform waves when China opened up port cities and replaced central government planning with capitalist markets. Fast-forward three decades: Today that generation exports goods — not only shoes and T-shirts but also airplane components, computers and cars — to every corner of the world.
The point is, their life's path has taught them everything is possible if you work hard enough, a motto engraved in their hearts and passed along to my generation. That may help explain a lot of things that cause Westerners to raise their brows.
At the recent Plastics News Executive Forum in San Diego, Helmar Franz, a German expatriate in China working with machinery maker Ningbo Haitian Group, shared a story: On a visit to a customer in Taizhou, he saw about 100 injection presses molding plastic knives, forks and spoons.
“As an engineer, when I see the products, I expect them to be made with a press with an accumulator. But their machines are very low-tech, even by Chinese standards. ... They designed the molds according to their low-tech machines at their in-house tooling facility, and the products turned out OK,” Franz said.
Doreen Huro Michelini, a consultant who has set up manufacturing sites in China and Mexico, said in her forum presentation Chinese companies also like cost targets. “They always have a way to reach a cost target without compromising on quality,” she said.
So, how can American companies beat foreign competition? As Nypro Inc.'s Jim Buonomo said: “There is only one marketplace; you can compete in it globally or locally. The trick is finding a niche where you can compete locally and fare well globally.”
The question becomes, really, how can American companies adapt to the new business environment?
The No. 1 task: Stop thinking what needs to be done is impossible. Investigate the market potential and cost structure of your own business and of your competitors', learn to use different resources, and make an objective evaluation of attainable profitability. Then take action, no matter whether that means closing down plants or developing new products. The Chinese waste no time doing inefficient repair work, Franz said. “They'll just stop and start new.”
Whatever approach you take, just remember, your competitors are saying to themselves: Nothing is impossible.
Sun is Plastics News' Akron, Ohio-based Asia specialist and staff reporter.