Sedex's latest Responsible Sourcing Insights Briefings indicate that the key supply chain risks in China still include extremely high levels of corruption, environmental pollution issues and slow working conditions reforms.
A diverse region that offers many opportunities, China has had a remarkable period of rapid growth shifting from a centrally planned to a market based economy. Today, China is an upper middle-income country that has complex development needs while remaining unparalleled in the region in terms of its productivity levels and speed at which deliveries can be turned around.
Key insights include:
Most common supply chain issues in China include health and safety issues, particularly relating to chemical and machinery management, and wages and working hours challenges;
Inadequate storage, management and training for hazardous chemicals or lapses in their use is recorded as the highest occurring issue in China by external site audits on Sedex, at 4% of all single issues recorded;
Political liberalisation is failing to occur on a notable scale, enforcement of labour standards is weak, and there is a lack of control over sub-contractor networks.
According to Carmel Giblin, CEO at Sedex, it is important that companies operating in the country understand the changing environment, with a growing middle class and changes in the availability of previously plentiful suppliers of cheap labour. China remains a key manufacturing and sourcing location and the international scrutiny on the region – along with efforts made by Sedex global community of buyers and supplies – is helping to improve management processes and working conditions.
Arvind Ramakrishnan, Head of Asia at Maplecroft observes that China’s main advantages are its productivity levels and the speed at which deliveries can be turned around in China.
Sedex risk briefings focus on different regions, issues or business topics relating to supply chain sustainability and feature insights and viewpoints alongside case studies of best practice.