Over the years, China has emerged as the sourcing powerhouse of the world.

A cursory glance would reveal the power of this economic behemoth. China controls the supply of rare earth minerals. The Asian giant also has the largest base for APIs in the world. The country's cavernous factories churn out millions of electronic products, making it the most favored manufacturing destination at present.

The country is also the chief manufacturer of chemicals and acids besides being the leader in manufacturing of capital equipment. Needless to say the middle-kingdom is also a kingpin in packaging products and glassware.
However, category managers do face varied procurement challenges while sourcing from China.
It is a well-known fact that China offers cost advantage over developed economies; but category managers still worry about the size of actual cost savings that could be achieved by sourcing raw materials, products and services from China.

Product quality supplied by the nation's suppliers is another factor that may worry category managers. Adding to this are concerns regarding environment and working conditions of the labor force.
Economists and industry experts predict that the substantial cost advantage enjoyed by the country could be eroded as Chinese workers continue to demand higher wages. Yuan's strengthening against the dollar could also play a key role in reshaping China's supply markets.

As companies move towards category management, and given the complexities involved in the China's supply markets, there is a need for continuous supply of market intelligence as opposed to discrete chunks of data that are currently being churned out. Meanwhile, opacity in contract negotiations and lack of credible supplier intelligence can pose a challenge to category managers.

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