East China cities hope to becomes sourcing center

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Last updated at: (Beijing Time) Friday, October 10, 2003

East China cities hope to becomes sourcing center

Shanghai and its neighboring provinces hope to become a sourcing and export hub for electronic parts, thanks to an improved environment for exporters.

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City becomes sourcing center

Shanghai and its neighboring provinces hope to become a sourcing and export hub for electronic parts, thanks to an improved environment for exporters.

The east China region, including Shanghai, Jiangsu, Zhejiang, Auhui, Fujian, Jiangxi and Shandong provinces, generated 53 percent of China's total exports of notebook computers, 48 percent of monitor exports and 41 percent of diode exports last year, according to China Customs.

"Shanghai is growing into Asia's new commerce hub and sourcing center, offering convenience, services and sourcing options in one central location," said Merle Hinrichs, chairman of Global Sources Ltd, which is hosting a three-day fair in Shanghai for buyers of electronic parts.

Many multinationals have already set up, or plan to establish, global sourcing centers in Shanghai.

Us-based Best Buy Co Inc, North America's largest retailer and distributor of consumer electronics and home office products, set up a global sourcing office in Shanghai last month, which is also its first overseas sourcing unit.

"The sourcing center is expected to save cost and time for Best Buy since the company plans to expand its procurement in China," said Lu Weimin, vice president of Best Buy Asia.

In addition, General Electric Co plans to set up its China technology center in Pudong, with sourcing becoming one of its main tasks.

Ge's sourcing volume on China's mainland was about US$1.3 billion last year, a figure that is expected to reach US$5 billion by 2005.

"The reason why we do so much sourcing here is the quality is very good," said Yoshiaki Fujimori, president and chief executive officer of GE Asia Pacific.

"When we are comparing production costs today, in-cluding labor, capital and productivity, Shanghai is still very good, significantly better than many other metropolitans in the world."

Shanghai is surrounded by thousands of factories run by experienced suppliers capable of manufacturing to buyers' specific require-ments, said Hinrichs.

The shanghai government is also encouraging multinationals to set up procurement centers in a bid to boost exports.

Preferential policies such as lower tax breaks and a smoother registration process are attracting more multinationals to set up sourcing offices or centers here.

The number of multi-national procurement centers is expected to hit 70 in Shanghai by the end of this year, the Shanghai Foreign Economic Relations and Trade Commission said. (shanghai daily)

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