I could not help being somewhat sidetracked this week by unprecedented political events in the U.S. as Barack Obama became the presidential nominee for the Democratic Party. Conducting his campaign with a message of substantial change, Barack Obama has also indicated a desire to engage more constructively with China. China Dialogue recently compared and analyzed the policies of both presidential candidates on climate change, and has republished in full Obama's speech from late May setting out his vision for a new energy future. Bemoaning the U.S.' failure to lead on climate change and its struggling to stay relevant in the debate, Obama noted that already some coal pollution from China's dirty plants is making its way to California, and in an effort to curb China's carbon emissions, he promised that

as we develop new forms of clean energy at home, we will share our technology and innovations with all the rest of the world. If we can build a clean coal plant in America, China should be able to as well. 

Obama's willingness to more readily share technology and innovations with China resonates with the approach adopted by German chemicals manufacturer BASF, which is finalizing plans for an ambitious joint venture in Nanjing with China energy group Sinopec in which the latter is set to receive $900m in investment to boost output by 25% over the next three years. Martin Brudermuller, head of BASF's Asia activities, told FT.com that the Nanjing operation will

aim to gain expertise in combining China's famed low cost
with the development of new design and production skills. If all goes to plan, this will involve importing ideas from BASF's operations around the world and linking these with concepts developed by BASF's 6,000-strong staff in China.

According to Brudermuller, such an approach is required as China's economy starts to mature. Yet BASF's strategy in China is part of a current wider phenomenon as China goes through (as the FT.com article puts it) a more subtle phase:

Known for its rapid progress to become the world's joint-second most productive manufacturing region, China...is becoming a giant test bed for manufacturing ideas, building on its existing strengths in low-cost production by using the efforts of engineers and developers not just in China but from around the world.

The article goes on to cite Jimmy Hexter, a director at the Beijing office of the McKinsey strategy company, who claimed that the greatest commercial rewards will be reaped by companies who are able to optimally utilize networking approaches that link different groups in different countries.

The growing imperative for networking and collaboration in global supply chains has also been emphasized in a new report and supply chain model, Future Supply Chain 2016, published by the Global Commerce Initiative and consulting firm Capgemini. Citing the new report, Sustainable Life Media outlined the best way companies can redesign their supply chains for maximum efficiency:

The coming years will see a new era for industry collaboration, which will become an important factor for future success...Some business areas that are now considered to be core differentiators may well become candidates for collaboration with competitors.

Cooperation in the form of information sharing and collaborative warehousing and distribution, the report found, can offer efficiencies that companies simply cannot achieve on their own.

If there is one product that has received way too much attention in 2007, it must be those millions of toys 'made in China,' a tainted few of which caused such an uproar this year. Those 'few,' whether blamed on the faults of foreign importers or on Chinese manufacturers, had a significant impact on global perceptions of the quality of Chinese products. Yet in the aftermath of the Mattel saga Chinese toys, food products and others have all been subjected to stricter quality controls, and have moreover been caught up in 2007 in the general drive for improved quality occurring in China (see CSB's 2007 China Sourcing Review).

As reported in a previous posting, China's toy-making heartland in Guangdong province stated already by late November that global demand for its toys had rebounded from the recall dramas of earlier. In the end nothing much has changed, because with Chinese toys still cheap and their quality improving, demand for them will not abate. 

But not so for Barack Obama.

A Reuters report yesterday quoted the presidential hopeful as saying he would ban all China-made toy imports following the safety scandals of this year, though admitting that such a move would cut off about 80 percent of toys in the United States. Calling for tougher inspections, Obama cited the example of Japanese food safety inspectors who go to China and meticulously test all food products sent from there.

Obama would probably be heartened by reports from China yesterday claiming the four-month national food safety campaign managed to hit its targets early, with a state newspaper reporting that officials seized 'thousands of tainted products and (put) many unregulated shops and eateries out of business... Inspectors shut 192,400 unlicensed food producers and pulled 29,800 products from the shelves.' 100% of stores in larger towns and cities, it was proclaimed, now had a quality label system in place and could trace back where their supplies came from.

And on the day after Thanksgiving, Xinhua reported yesterday, U.S. customers 'rushed in their hordes' to stores such as Toys 'R' Us to purchase Christmas gifts for their children. The article mentions Samantha Gusteins, a mother of one, who was carrying two big bags of toys and about to leave a store, saying "The toys are many and affordable."

No doubt she and many other shoppers would have Obama think twice about going to such extremes...