Final Thoughts on NEPCON South China 2012

I have attended every NEPCON South China over the past nine years and it has always been a busy, well-attended trade show. What's surprising this year is that with all the talk of a slowdown in Chinese manufacturing, the show was more crowded than ever, especially during opening day.

Many who had thought that economic problems from the west were going to find their way to China and to this show would probably feel they were proven wrong just by looking at the sheer size of the crowd lining the aisles. In fact, many exhibitors came to Shenzhen with a sense of optimism that the Chinese economy could withstand its latest economic setback and pick up where it left off sooner rather than later. 

Yes, China is changing rapidly - going from the third world to the first in the shortest amount of time. There is, of course, a price to be paid for this lightning pace of change with many companies expected to fall by the wayside. It has gotten much more expensive to do business in China and the economic advantages which it held for so long are starting to wane.

But that's one side of the business. In the many interviews and discussions I had during the show, one stood out for the truth that many fail to see before pronouncing the decline of Chinese manufacturing. The head of a major distributor in the country told me that what China has built up over the last two decades is much sturdier than the fickle economy.

Wages will rise – that is to be expected and so will the cost of living. It has happened to so many developing countries so why not China. However, the infrastructure that China has built up for large-scale manufacturing as well as the abundance of talent that has been developed in the country cannot be duplicated easily elsewhere. With these elements in place, China has assured itself that its position as "Factory of the World" will be safe for years to come.

There will be migration of manufacturing to the western regions of China, and perhaps some higher-end low volume products could be manufactured in other countries cost-effectively as well. But the bulk of medium-to-high volume manufacturing will still remain the country and this means business-as-usual for many of the exhibitors I spoke to.