Companies to receive supply chain help

China – US retailers who depend heavily on China-made consumer goods will now be given assistance by the Product Development Partners (PDP), a new joint venture company by G Studios and a few China-based consumer products goods companies.

The new company will mobilise private and quasi-government resources, to assist in managing manufacturing, import and supply chain issues and provide resources to US retailers. It said it plans to work with Hong Kong trading companies, as well as the Hong Kong Trade Development Council and the US Commerce Department to achieve this.

The company identified three threats in China's supply chain industry as the compliance regulation, wage increment of 15-25%, and the currency inflation against the US dollar in the 7-10% area, which has resulted in the closure of thousands of factories there in the first quarter of 2008. The sluggish worldwide economic and the constant interruption of this year's Olympic also added in the pressure on profit margins.   

"For the first time in a generation, US companies who depend heavily on imports from China will face severe strains and significant disruptions over the next 18-24 months starting this spring. This means fall and holiday goods for US retailers could be impacted in a big way," said PDP CEO Michael Gordon.

"With multiple issues to address, each more critical than the next, we felt it was an opportune time to launch PDP and enroll leaders on both sides of the equation to assist US companies and ensure continued operating efficiency and cost containment in order that the negative pressure upon retail margins would be mitigated."