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That's according to the 2013 Q1 Barometer, a quarterly synopsis of Asia-based manufacturing and the quality-control services industry. The Barometer is sponsored by AsiaInspection, which provides quality-control services for businesses importing from Asia and Africa.
Manufacturing Declines in the West as China Cashes In
This year started off strong for China. AsiaInspection figures show Performed Inspections in China having grown by +12.5% over the past year. Smaller manufacturing neighbors also saw significant growth - Vietnam and Thailand were both up +33% and Bangladesh +15.6%.
Talks of a return to American manufacturing may be premature. This January Walmart committed to invest $50bn in "Made in America" products over the next 10 years, but the reality is that this only amounts to 0.93% of their total sales for the period. AsiaInspection figures confirm that manufacturing outsourcing is still on the rise from the West - there was a +15% increase in inspections requested from North American customers year over year.
Q1 Performed Inspection growth in China was strongest in food products at 212%, compared with Q1 2012, followed by industrial and mechanical items (+42%) and then body care products (+36%). This trend indicates China is branching out from traditional manufacturing: toys, textiles and electronics.
Fire in the Factory
Since the Tazreen Fashions factory fire that killed 112 in November, Bangladesh officials to date have shut down over 300 "ready-made garment" factories in the capital of Dhaka. Described as death traps by local officials, these unofficial manufacturers are sub-contracted by larger factories without the knowledge of international buyers. These factories operate with a complete disregard for worker safety and put thousands of lives at risk. Continued reports of factory fires across Asia show that this trend is set to continue and on March 25th, six more workers died at a furniture factory in India.
"The sheer volume of unauthorized manufacturers found in Bangladesh shows the probability that lives will continue to be needlessly lost," said Sebastien Breteau, CEO of AsiaInspection. "The only safeguard for workers and brands is to ensure business is conducted with factories that meet or exceed safety standards."
India Manufacturing in High Gear
India started 2013 by announcing its target to grow from the world's ninth-largest manufacturer to fifth-largest by 2022. To achieve this, India must increase its manufacturing GDP from 15% of the total to 25%.
India's long-term growth projection is reflected by AsiaInspection figures, showing +43% year-over-year Performed Inspection growth from Q1 2012, with +52% growth in Q1 2013 alone. Also experiencing gains in Q1 was Pakistan, up +21% from one year ago and Malaysia up +7%.
China's Version of the Horse Meat Scandal
While "the horse meat scandal" raged in the West, costing high-profile retailers like Tesco millions in lost sales, China has been plagued with the "pig dumping scandal". To date over 16,000 dead and diseased pigs were found floating in the main source of Shanghai's drinking water. The discovery exposed an unknown practice apparently common in China: Underground traders buy up pigs that have died from disease and sell the pork illegally to food processing firms contracting with small importers and large retailers.
AsiaInspection figures suggest food is increasingly becoming industrialized, with China leading the charge. Inspections of food products surged +212% from Q1 2012.
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