Friday, July 16, 2010

Mexico looks to gain edge over struggling China

The Monitor
Ana Ley
July 15, 2010 9:50 PM

McALLEN — Mexican business leaders hope to gain an edge over Chinese manufacturers reeling from rising production costs.

Foreign companies that depend on China’s low costs to compete — from distributors of plumbing equipment to automobile manufacturers — are shifting factories to other developing countries.

“There are a lot of companies that are leaving China,” said Eduardo Coronado Quintanilla with the Camara de la Industria de Transformacion de Nuevo León, the state’s chamber of industry. “It’s not as cheap as they thought.”

That message resonated during a conference Texas A&M University hosted Thursday in McAllen, where Coronado noted difficulties in working with companies overseas. Calling a supplier on the phone, he said, is often too complicated due to time-zone differences. E-mail exchanges can often take days.

At the start of the economic recession in late 2007, some companies were overwhelmed with surplus inventory from suppliers in China. It took months before many could reduce their supply to meet a dramatically lower demand. As the economy began to recover, companies ran into the opposite problem — not enough inventory.

“Their ability to react is very limited,” Coronado said. “We have ... click here to read more