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Outsourcing from China

admin — Sat, 04 Sep 2010 19:04:56 +0000

Writing clip

By Viktoriya von Berg

Outsourcing from China

The People’s Republic of China (PRC) is the largest country in Eastern Asia. The Communist regime that assumes a single party system is dictatorial and dominating, and people’s rights are often nonexistent or significantly reduced. However, Chinese government recognized the potential of its country on international business arena and introduced comprehensive economic reforms in 1978 that noticeably pulled out China from poverty. The availability of labor that is proportional to the large population of China, approximately 1.3 billion, is the major factor that influenced growth of the apparel manufacturers serving European and North American clients. The low cost of labor constitutes the major competitive advantage of Chinese suppliers along with improved technology, attractive lead times, quality control, high production volume and efficient communication.

China– is a permanent member of the UN Security Council and enjoys its membership within several multilateral agreements such as WTO (World Trade Organization), APEC (Asia Pacific Economic Cooperation), EAS (East Asia Summit), G-20, and SCO (Shanghai Cooperation Organization.)

World Trade Organization

Textiles and Apparel

The safeguard on textiles and apparels coming from China to the USA that allowed the USA workers and companies to respond to increased imports from China has expired in 2008. Quotas on textiles and apparel have expired in 2005 (2) Even before these changes took place, roughly by 2000, ‘’America became China’s second largest trade partner, supplying variety of goods.’’ However, there is a trade imbalance between two countries with China enjoying a hefty surplus by using high tariffs and restrictions on the USA exports. (3)

Permanent Normal Trade Relations

PNTR is the acronym used to describe free trade of the USA with any foreign nation. PNTR replaced the MFN ( the most favored nation) in 1998. Since China is the member of the WTO it enjoys Free Trade Agreement with the USA.

Asia Pacific Economic Cooperation (APEC) is comprised of 21 Pacific Rim countries with an ultimate goal of regional trade and investment cooperation in order to enhance ‘’economic growth and prosperity’’ (1) Its members constitute approximately 40% of the population around the world, more than half of the world GDP (54%) and lightly less than half of the world trade (44%) (1)

China is also a member of the G-20 –a forum of the world’s largest economies that play a crucial role in today’s global market.

Timely and efficient communication of Chinese suppliers was the major reason that affected my decision to work with one of the factories in that part of Asia.

After contacting dozens of different manufacturers in China, there was one particular company that responded in a timely and professional manner. Dongyang Mohang Imp & Exp Co., Ltd, is a manufacturer and trading company located at the city of Dongyang Province/State of Zhejiang. It operates as a full service factory with capacity of 50,000 per month. There is no minimum order requirement; however they do charge higher costs for limited orders. The Dongyang Mohang Imp & Exp Co accepts LC (letter of credit) as a payment option. In addition, company has an established 5 year relationship with Target and K-mart. The company specializes in baby clothing –dresses, rompers, skirt, baby sleeping bags, baby suits, hats children. According to Susan Bao, manager, the number of employees totals to about 101. The factory size in sq. meters is 5,000–10,000. The company focuses Southeast Asia and Western European markets. They export approximately 81%-90%.

There are 5–10 people in quality control department. In addition, company works with third parties that perform QA/QC. The delivery time is about 25–30 days from the time of order.

Total Costs

The factory quoted the FOB Shanghai of 40$ and factory charges $4.05 per item. The shipment will be delivered to the Port of New York. There is 9.4 % tariff for children’s and adult cotton dresses according to HTS (please refer to the attached excel calculations.)

*Cost and Risk Analysis CHINA*

Direct Costs	Amount in US Dollars
Total Product amount	1000	units
Total Product Cost	$4.05	Per Unit
Freight	$40	Per Shipping
Tariff for cotton dresses (children/adult)	9.40%	of 4050$ =$380.70
Total Price Calcultions	4.05X1000+40+$380.70=4470.7 USD.
Total Direct Costs	_________$4470.7_	Per 1000 Units



Indirect Costs — Risk Analysis	Level of Risk

	Mark the appropriate Risk Category

	High	Medium	Low
Factory’s Reliable Delivery			X
Factory’s Fast Turn Delivery		X
Factory’s Working Conditions			X
Ethical Sourcing			X


Total Indirect Cost — Risk Rating	___________________LOW_________(High OR Medium OR Low)



Some Examples of Macro Costs — Risk Analysis	Level of Risk

	Mark the appropriate Risk Category

	High	Medium	Low
Political Climate		X
Local Culture and Customs		X
Corruption	X
Country Infrastructure			X
Education		X


Total Indirect Cost — Risk Rating	Low

Silence

admin — Wed, 20 Aug 2008 03:21:53 +0000

I think of Silence as Hope
to hear harmony of life
I want to break the ticking Clock
That cuts its span as sharpest knife

I need Serenity as Friend
To visit place where lights are off
I feel that Stillness what was meant
The firmest speech was meant as soft
as Whisper of the falling snow
or Sigh of Wind, and Time as slow
And distant as a Waltz of Past.…
I need it now. I need it fast.

Galatea Of The Dreams

admin — Tue, 27 May 2008 19:14:06 +0000

I can’t fall asleep tonight. The TV is broken, and it is impossible to immerse into life behind the blue screen. What should I do? He fell asleep, selfishly hiding on our bed, looking so content. Where is he? Some place else…..dreaming. What about? Who comes to his dreams? Someone does, and that someone probably is a woman. How does she look like? Is she is all about big dreamy eyes with long eyelashes? She is surreal. The tender square between her nude breasts looks like a window through which the aquamarine sky and olive tree is clearly visible. She takes his hand and they both walk through this square to the place surrounded by mountains, with orange sun behind the dead olive tree. He is looking at her with incomprehension.

-‘’Where are we?’’

She walks through the tawny mist slowly, until her long eyelashes hang over his head like golden suspension bridges leading to eternity. He looks at her face that is so close, her eyes wide-open, and suddenly he sees through them; the myriad of molecules, accurately lined up and running to invisible point of the smallest, entwining with others to form an inverted triangle –constantly moving, falling apart into a complete chaos, a splash of multicolored particles dancing in the whirlpool of madness. Now he can see that she is much bigger, looking at him from above. She is comprised of these particles and her face is the face of an angel with thin arched eyebrows and eyes filled with compassion.

–What time is it? Morning?

He is desperately trying to find a clock, and sees that three of them are melting, running down as though they were made from the water reflecting the time of eternity…

–What time is it? The angel is sadly looking at him and suddenly the roaring wind of protons sweeps her precarious features, bouncing and casting millions of particles, creating a wind of chaos, trying to pull him into this metaphysical madness; deeper and deeper, he is almost blinded by the devouring wind, unable to see the way out. What time is it? White time?

He is escaping through the square shape window back into the room. He looks at his night guest with horror but she is nothing she was before. There is a tender boy with golden hair sitting in the middle of the square holding dark-blue egg. The woman lovingly looks at the boy protecting him from the world. Her face is so familiar…She is me, and the boy– is our son. It is 12:36 am, my husband is sleeping soundly. The swede Catalonian twilight at the other side of the square is dimly lit by the orange moon.

The tall slender man with mystical Spanish eyes is standing up from the ground next to the olive tree. He is coming very close to the square,smiling condescendingly .He curiously peeks into our room and shuts the window-door which now looks like a cover of the book with name written in Spanish: ‘’Salvador Domingo Felipe Jacinto Dalí’’

Hat ( From Warm and Salty Memoirs)

admin — Tue, 20 May 2008 20:55:36 +0000

I was quickly passing by the old elegant buildings on the Upper West Side in Manhattan. It was a cold February evening and it seemed like the strong wind tried to prevent me from walking, breathing and even looking good. My hat felt down and my hair was a mess; all tangled, flying toward some unknown destination ahead of me. I tried to keep it together and to chase my hat picked up by the waves of cold and unhelpful wind. I was almost flying pushed by its strong arms. One moment I was close to catch my dark Channel creation but the wind pulled it up from the wet wintery ground, twirled it in front of the lit up window and cast it into the darkness.

I started crying. I was devastated and overwhelmed with the feeling of pure misery. Why everything I love in my life always goes away? Am I destined to chase something I cannot get? I helplessly leaned against the wall of some building. It felt like the hard shoulder of the man who wants to use you: wide, cold and careless. I was never used by a man in my life, at least I hope I was not, but I heard these stories from Jisel’. And who said that being used by a man is not better than to be alone?

Loneliness.…. I looked around. The street was empty and the wind came down. It became warmer and the sparkling snow started to fall on my hair covering my coat with a silver lace of tiny snowflakes. ‘’ Frozen tears,’’ I thought. You can’t hold them in your hand or they will turn to rain of tears. It is the nature’s way of dealing with the pain, to turn its rain into masterpieces of silver crystals with ideal dimensions.

I slowly started walking, with this new feeling of calmness and anticipation of something good to happen. Suddenly I turned into cozy, winterless street and realized that I’ve got really far from my home. It did not seem to bother me tough; there were times in my life when I was much further from the place I used to live. So far…

The rare snowflakes turned into the sparkling blizzard and I continued to walk — smiling.
–Excuse me,’ strangely familiar cadence of the man’s voice woke me up from my winter dream.
– ‘‘Yes?” I turned around.
-” I’ve found this on the street, could it be yours?”
The man in a dark coat handed my run-away fedora. He stepped out from the shadow of the sidewalk, and the light from the unfamiliar window lit up his so familiar face. I could not believe my eyes. We were standing in front of each other trying to comprehend the ever repeating miracle of coincidences that bring people together . Ten years ago, I left Russia for my new life in New York. It was my life out there that I abandoned, my love.…..our love.

We continued to stand in silence, afraid that the shadows of the past will take us away from each other. The blizzard became stronger and I put my hat on.
-”It’s snowing,’ I looked at the empty street lined up with dreamy lamps casting golden lines through the lacy curtains of the white snow.
-”Yes, it is February.
– February 14th.

Warm and Salty Memoirs

admin — Fri, 16 May 2008 00:44:56 +0000

It is getting cooler. The ocean is not as turquoise and innocent as it was in the morning. It became indigo, with red and yellow flickers of light that look like some passionate artist painted them on the water’s surface with thin brush. The hot summer day is slowly turning into serene evening.

There is this strong smell of the sea; warm summer wind tangles my hair that flies toward the red setting sun. I wear white dress, knee-high that looks like the white sails from the blue boat anchored at the far horizon.

He is sitting on the peach tinted sand eating cherries. He likes these red beads of sweetness and immediately stains his hands with sweet burgundy juice. He smiles at me, stands up and runs to the blue water, plunging his hands into it, watching how the little waves take the red away. I see him waving at me. His lean figure of a swimmer, with broad shoulders and long torso looks as though it was carved from dark-golden marble. ‘’ Roman God,’’ I think quickly, and the blaze of warm blood slowly goes up to my head making me dizzy.

‘‘Let’s go, let’s go!” his voice echoes on the green rocks that surround our hidden lagoon.
I stand up and run to him falling on my way through the dunes, catching the sand in my pockets, standing up and running again until I hold his hand, warm and strong, and we both walk along the shore.

Everything is so tranquil and peaceful. We look at the water that flickers with the reddish flames of the setting sun casting the last rays before drowning its hot body into to the cool sea. I close my eyes.…. It hurts to look at this pull of hot flames, and I continue to walk with my eyes closed holding his hand. I still feel dizzy, as though I’ve drank two glasses of that delicious local wine.
-‘’What is it called?’’
–What are you talking about?’ He looks at me quietly.
–The wine we drink at the ‘’Shoress’’. I forgot its name.
– It is called ‘’ The Sun in the flute’’
–The flute….yes, now I remember and the feeling of happiness fills me, lifts me up, and I feel like I am flying, swimming in the ocean of unconditional love, peace and joy mingled with the warm, salty air.

”Look,” he wakes me up from my dream. I open my eyes and see that the red sun is gone and enormous silver moon is taking over the realm of night. It is majestic. It looks like a big royal coin minted from pure silver.
I stealthily look at his face. It looks thoughtful and distant. I love him so much. I want to tell him that I am so happy to be with him and that this night and warm wind, and the hot sand together with blue Ocean, and the red dress he bought me yesterday at the local market mean so much to me…,but I do not say anything. I know that he already knows everything I want to say. The way he is looking at me smiling, his face lit up by the moonlight I can feel, that the words will only disturb the magical connection between us.

We walk away from the seashore surrounded by Silence. The moon has headed off from the water and became smaller and even brighter. We can see her tender face through the webs of the trees. The stars flit and fall into the crowns of the fruit trees where they probably turn into colorful lanterns that twinkle at the elfish banquets that take place after all people fall asleep. The crickets are singing, the wind whispers something about eternal love and far away we see the warm lights of the town.