China Held its Ground in 2012

Shenzhen, China, January 15, 2013 - QIMA, a leading provider of quality control services for businesses importing from Asia, today announces the QIMA 2012 Q4 Barometer, offering a year in review of Asia-based manufacturing and the quality control services industry.

Here is a look back at a selection of the biggest manufacturing and quality control industry-related stories of 2012.

"A textile factory in Vietnam - ordered inspections grew by +34% in 2012."

Asian Manufacturing in 2012: Despite Global Pessimism, Exports Remained Strong on Demand

Despite global pessimism, figures show the Asian export market, and specifically China, remained strong. For the first three quarters of 2012, China's exports grew to account for 11.1% of total global trade, up 0.6% from the same period in 2011.

This trend is supported by QIMA figures, showing 2012 Performed Inspection growth was highest in Vietnam at +34%, followed by Bangladesh (+21%), China (+13%) and then India (+10%).

To put China's comparatively modest 13% growth in perspective, it is still accounting for 84% of all exports from these four countries ($541 billion USD out of $645 billion USD for September through November 2012). "Sustained double-digit growth of these proportions reflects China's continued dominance in world manufacturing" said Sebastien Breteau, CEO of QIMA.

United States Regains Top Spot as China's Largest Export Buyer

QIMA 2012 Performed Inspection figures show the United States up +16% vs. 2011. This is not surprising as in December 2012 the United States replaced the European Union as the No. 1 buyer for Chinese exports, buying $319.4 billion USD worth of goods through November, up 8.2 % Y/Y. During the same period, inspection figures for the 26 European Union countries grew by a modest +4%, led by France and the United Kingdom.

Food Safety: China Continues to Repeat History with 8,500 Dead

As Chinese food products are increasingly being exported, continuing scandals reflect the poor food safety processes currently in place. Amidst this danger, QIMA Food Packaging & Food Inspections were up +111% Y/Y.

Conservative Chinese estimates claim there are approximately 8,500 deaths caused each year by Chinese-made food products in China (New York Times). In 2012, China exported over $56 billion USD in food-related products, while according to the FDA only 2.3% of all food imports into the USA are physically inspected. China-made food scandals continued this year with the cancer-causing substance aflatoxin being found in infant formula.

With the global population crossing seven billion, expect food production to continue to be industrialized and China to lead, stressing the need for stricter oversight at the source.

Rising African Demand for Quality Control Reflects Record China-Africa Trade

According to the China Ministry of Commerce, in terms of project contracting, Africa is now China's second largest foreign market. Bilateral trade between China and African countries reached 163.9 billion USD in the first ten months of 2012, up 20% from the same period of 2011. Reflecting this yearlong boost in bilateral trade, QIMA 2012 Performed Inspections in African countries increased +85% from 2011. Inspections in Asia for African clients increased +31% Y/Y with Egypt, Morocco, Nigeria and South Africa leading.

Bangladesh Factory Fire Exposes Supply Chain Monitoring Difficulties

112 people were killed last month at a factory found to be supplying Walmart and Sears in Bangladesh. The country is the No. 2 apparel exporter in the World after China, with the textile industry making up 77% of its exports.

Walmart and Sears both claimed they were unaware their apparel was being manufactured there, highlighting the difficulty for global brands to monitor their whole supply chain. It also pinpointed the importance for third party audits to thoroughly check on manufacturers' sub-contracting practices. Amid such headlines and increasing public scrutiny on brands manufacturing conditions, QIMA Audit services ended 2012 up +36% Y/Y.

What to Expect - The 2013 Manufacturing Landscape

Despite a change of leadership and the government's increasing focus on stimulating domestic demand, exports will remain the basis of China's economy. Despite the hype surrounding China's inflation, an appreciating RMB and rising labor costs, there is not yet a suitable replacement for China and it will continue to be the dominant source of manufacturing, even with expected sustained growth for Vietnam and Bangladesh.

The geographic sourcing landscape within China will continue to evolve. In the past two years QIMA has seen a 270% increase in inspection activity in Chengdu, Chongqing, Wenzhou and Zhengzhou. Predicting sustained increased demand, this September Cathay Pacific setup air cargo routes from Zhengzhou.

Finally, new and updated safety regulations should force importers worldwide to strengthen their technical quality control at the source in 2013. REACH regulations in Europe are a significant example (with the recent adding of new Substances of Very High Concern, and the new May 31st, 2013 deadline for registration of imported substances), as is the expected deployment of the Food Safety Modernization Act in the US (imposing stricter food safety controls).

About QIMA - Your Eyes in the Supply Chain!™

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

Press Contact

Michael Mesarch

Tel: (+86) 755 2223 9888

Email: press@qima.com

References:

China's Corrupt Food Chain. New York Times. Retrieved January 9, 2013 from

http://www.nytimes.com/2012/08/18/opinion/chinas-corrupt-food-chain.html