QIMA Q1 2011 Barometer: China's Industry Moving Inland to Keep Exports Competitive

Shenzhen, China, April 7, 2011- QIMA, a leading provider of quality control services for businesses importing from Asia, today announces the QIMA Q1 2011 Barometer,a quarterly synopsis of Asia-based manufacturing and the quality control services industry.

Manufacturing Moving to China's Interior

QIMA service figures show significant increases in inspections performed in China's rural inland provinces, reflecting a shift of manufacturing operations in China to the west and north. From Q3 2010 to Q1 2011, inspections in Anhui Province have increased +175% and +118% in Hebei Province. Many factory workers, originally from inland regions, are staying home after Chinese New Year to fill new jobs closer to home, preferring the lower inland province average wages of $114 USD, but with a lower cost-of-living, to the higher average coastal city wages of $205 USD, but with rampant inflation.

These new jobs are a result of companies moving inland to take advantage of these lower labor costs. This fall, iPhone manufacturer Foxconn will complete construction of a new plant in inland Henan province. According to QIMA figures, from June 2010 until January 2011, inspections performed in Henan increased +78%. Other Fortune 500 's moving inland include HP to Chongqing and Intel to Chengdu, with more companies expected to follow soon (Financial Times).

Inside of a factory in Anhui Province

"China's coastal cities have begun to improve themselves in recent years as reliable suppliers that can produce to international quality standards." said Sebastien Breteau, CEO of QIMA. "The manufacturing sector of provinces from rural inland China have not yet fully matured, nor maintained the same quality levels as developed coastal regions. It's vital that businesses outsourcing manufacturing to those regions ensure every product meets international quality and safety standards."

Chinese Exports to Iran Continue to Increase Thanks to U.S. Sanctions

Despite continued turmoil in the region, the Middle East was up +40% year-over-year. Within the region, Iran saw the largest increase, up +215%. Thanks to increasing trade sanctions against Iran by the U.S. and other Western nations, China-Iran trade has increased over the last decade, from $2.5 billion USD in 2000 to $29 billion in 2010; this number is expected to increase to $50 billion by 2015.As U.S. allies continue to pull out of Iran, China is increasing its presence in the country, developing oilfields, importing minerals and exporting $11.1 billion worth of goods, including industrial machinery and construction materials.

Inspection by category figures for the same period reflect this trend, with Construction and Mechanical Items up +30%, increasing for the first time since 2009, and with Home and Gardenware up +43%.

U.S. and Canada Ordering More Inspections as Economy Improves

QIMA ordered service figures for the United States were up +34% year-over-year, with Canada up + 46%, reflecting an improved North American economy. Though service orders for the UK were up +23% and Germany +17%, economic woes led to decreases of -27% in Spain and -41% in Greece, which contributed to the EU decreasing -8% overall. Emerging countries maintained the highest growth levels with India up +66%, Bangladesh up +107% and Vietnam up +123%.

About QIMA - Your Eyes in the Supply Chain!™

QIMA is a leading quality control services provider for importers from Asia and Africa, providing web-based account management, fast scheduling and highly competitive prices for companies seeking Product Inspection, Factory Audit and Laboratory Testing services in Asia and Africa. QIMA serves clients from over 100 countries worldwide.

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