Different Risks of Doing Business with China

Strategic Risk and China

To mitigate against strategic risk, the best method is through planning. Strategic risk occurs when a business plan is implemented unsuccessfully. In the context of China, this could mean a fragmented implementation of moving manufacturing into the country from abroad. Teething pains occur with smaller projects like moving manufacturing to a new facility. Moving the factory internationally creates a higher probability of something going wrong.

Dependant on the size of the company, this risk can successfully be managed by partnering with an established firm specializing in manufacturing in China. Different cultures and

Operational Risk and China

As a broad overview. Operational risk appears through inadequate processes, people or systems. Looser control exercised by outsourcing operations to China does increase the level of operational risk. Workplace safety is a fitting example. Lower health and safety standards in China may adversely affect your companies brand. Large corporations have received frequent criticisms about their factories in China, with Apple coming under the spotlight for the environment at Foxxconn.

Professional companies exist to ensure operational risk is reduced to a minimum.  Perfection can never be achieved; therefore, operational risk will always exist. Companies generally accept operational risk as a cost of business. Before moving operations to China, weigh up the perceived benefits against the increase in operational risk. In the majority of cases, the advantages of China shine through.

Compliance Risk and China

The major concern for companies outsourcing to China should be compliance risk. Failing to meet industry regulations can result in significant financial penalties. Cheap manufacturing can result in corners being cut. Quality is usually the first. Chinese manufacturers have been known to fake trade certifications. Failure to meet set standards could result in lawsuits and reputational damage.

Compliance risk comes under corporate governance. Comprehensive risk assessments should be undertaken prior to any outsourcing. The majority of Chinese factories are reliable, reputable and compliant. However, due diligence must always be carried out to mitigate any risks of rogue suppliers.


Risk comes in all shapes and forms. Risk is present domestically and internationally. Occasionally, the risks outweigh the benefits of outsourcing to China. However, in the vast majority of cases China wins.

Planning and due diligence are the two greatest tools to mitigate risk. Implementing a plan and continuous monitoring are also required to keep risk levels under control. Outsourcing manufacturing ultimately makes managing risk much harder. However, many firms have successfully used companies based in China to their advantage. Visiting factories and performing checks is difficult if you are based thousands of miles away. Partnering with an established manufacturing specialist can enable your firm to benefit from China through mitigating risk.

We are using cookies to give you the best experience. You can find out more about which cookies we are using or switch them off in privacy settings.
AcceptPrivacy Settings


  • We use cookies

We use cookies

What Are Cookies

As is common practice with almost all professional websites this site uses cookies, which are tiny files that are downloaded to your computer, to improve your experience. This page describes what information they gather, how we use it and why we sometimes need to store these cookies. We will also share how you can prevent these cookies from being stored however this may downgrade or ‘break’ certain elements of the sites functionality.

For more general information on cookies see the Wikipedia article on HTTP Cookies.

How We Use Cookies

We use cookies for a variety of reasons detailed below. Unfortunately in most cases there are no industry standard options for disabling cookies without completely disabling the functionality and features they add to this site. It is recommended that you leave on all cookies if you are not sure whether you need them or not in case they are used to provide a service that you use.

Disabling Cookies

You can prevent the setting of cookies by adjusting the settings on your browser (see your browser Help for how to do this). Be aware that disabling cookies will affect the functionality of this and many other websites that you visit. Disabling cookies will usually result in also disabling certain functionality and features of the this site. Therefore it is recommended that you do not disable cookies.

The Cookies We Set

If you create an account with us then we will use cookies for the management of the signup process and general administration. These cookies will usually be deleted when you log out however in some cases they may remain afterwards to remember your site preferences when logged out.

We use cookies when you are logged in so that we can remember this fact. This prevents you from having to log in every single time you visit a new page. These cookies are typically removed or cleared when you log out to ensure that you can only access restricted features and areas when logged in.

This site offers newsletter or email subscription services and cookies may be used to remember if you are already registered and whether to show certain notifications which might only be valid to subscribed/unsubscribed users.

This site offers e-commerce or payment facilities and some cookies are essential to ensure that your order is remembered between pages so that we can process it properly.

From time to time we offer user surveys and questionnaires to provide you with interesting insights, helpful tools, or to understand our user base more accurately. These surveys may use cookies to remember who has already taken part in a survey or to provide you with accurate results after you change pages.

When you submit data to through a form such as those found on contact pages or comment forms cookies may be set to remember your user details for future correspondence.

Third Party Cookies

In some special cases we also use cookies provided by trusted third parties. The following section details which third party cookies you might encounter through this site.

This site uses Google Analytics which is one of the most widespread and trusted analytics solution on the web for helping us to understand how you use the site and ways that we can improve your experience. These cookies may track things such as how long you spend on the site and the pages that you visit so we can continue to produce engaging content.

For more information on Google Analytics cookies, see the official Google Analytics page.

Third party analytics are used to track and measure usage of this site so that we can continue to produce engaging content. These cookies may track things such as how long you spend on the site or pages you visit which helps us to understand how we can improve the site for you.

From time to time we test new features and make subtle changes to the way that the site is delivered. When we are still testing new features these cookies may be used to ensure that you receive a consistent experience whilst on the site whilst ensuring we understand which optimisations our users appreciate the most.

As we sell products it’s important for us to understand statistics about how many of the visitors to our site actually make a purchase and as such this is the kind of data that these cookies will track. This is important to you as it means that we can accurately make business predictions that allow us to monitor our advertising and product costs to ensure the best possible price.

The Google AdSense service we use to serve advertising uses a DoubleClick cookie to serve more relevant ads across the web and limit the number of times that a given ad is shown to you.

For more information on Google AdSense see the official Google AdSense privacy FAQ.

More Information

Hopefully that has clarified things for you and as was previously mentioned if there is something that you aren’t sure whether you need or not it’s usually safer to leave cookies enabled in case it does interact with one of the features you use on our site.

However if you are still looking for more information then you can contact us through one of our preferred contact methods. This Cookies Policy was created with the help of the CookiePolicyGenerator.com

Email: info@intrepidsourcing.com