Integration proves profitable for multinationals

Costs have climbed so dramatically that about 17 percent of multinational manufacturers in China have decided to shift their operations to other low-cost countries, according to a recent survey conducted by the American Chamber of Commerce (AmCham) in Shanghai and consultants Booz Allen Hamilton.

Multinationals will need to bring their best operations to China and fully integrate their export-oriented activities for global markets and domestic sales and distribution networks if they want to retain an advantage as China's operating environment becomes more competitive and costs increase, according to "China Manufacturing Competitiveness 2007-2008".

The survey, which questioned 66 manufacturers who are members of AmCham Shanghai's Manufacturing Business Council, showed that three out of four companies lack fundamental best practices in their China operations.