Manufacturing migration to China and Western corporate compromises

China

The migration of manufacturing from around the world to China is being driven both the country's insistence that goods be produced there to be sold to their government and large population of consumers, and also by the significant cost pressures global manufacturers have. Manufacturing has become a commodity business, according to Friedman (2005). The author of the best-selling book The World is Flat also mentions the fact that manufacturing will follow the lowest cost of production around the globe, and while China is the leader today, it could very well be India or even Eastern Europe in the future. Friedman warms that companies need to think like global competitors and not be too provincial in their approach to production, yet not sacrifice their core intellectual property and key competitive advantages. China has become very opportunistic in taking advantage of this situation, even specifying the formats for data used in the manufacturing process itself, which are called Enterprise Resource Planning (ERP) systems. This move is to lock out ERP systems from other nations running their factories and ensure their lasting manufacturing competitive advantage.