Blog: China visa fallout
Leonie Barrie | 4 July 2008
Many good Chinese manufacturers have survived and absorbed energy costs, rising transport costs, high input and commodity costs, soaring freight costs, rising wage bills and new labour laws (not to mention tough Western companies looking for cheap, cheap prices).
But they may not be able to survive the actions of the country’s visa issuing department according to research publisher Access Asia.
Restrictions have slowed the pace of obtaining Chinese visas, and a failure to extend residence and work permits has forced many foreign residents to leave the country. Tourist visas are also subject to extra bureaucracy.
The upshot is that apparel retailers and importers cannot get visas for their factory inspectors and quality assurance (QA) staff to enter China – and are consequently scrambling to find alternative capacity in Vietnam and Bangladesh.
As Access Asia’s Matthew Crabbe points out: “Smart manufacturers in those countries are offering keen prices and will go all out to win serious business away from China. For many brands (once they have made the move, and if a good job is done) the inclination will be not to bother to go through the process of moving production back to China all over again.
“Whether China wins the Olympics or not, the long-lasting fallout from the Games will be serious and terminal for a lot of business people as a significant percentage of business moves elsewhere and doesn't come back once the Olympics are over.”
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