CPG: China Packaged Goods

It used to be just “Made in China”. Now it’s also “Shipped From China” and “Shipped to China”. No matter how you look at it, China’s almost always in the equation.

What is SI talking about? In addition to being the primary outsourcing destination for many North American & European MultiNational Organizations, and one of the biggest manufacturers in the world in many areas of CPG, China is now a major driving force behind the global shipping industry. As per this recent article over on the Economist on China’s Foreign Ports, China has a significant influence over sixteen (16) major ports all over the world.

In addition to the major ports of:

  • Shanghai
  • Hong Kong / Shenzhen

China also has a (mainland) stake in:

  • Singapore
  • Djibouti
  • Chittagong (India)
  • Kyaukpyu (Myanmar)
  • Hambantota (Sri Lanka)
  • Colombo (Sri Lanka)
  • Gwadar (Pakistan)
  • Karachi (Pakistan)
  • Tin Can (Nigeria)
  • Lome (Togo)
  • Piraeus (Greece)
  • Antwerp/Zeebrugge (Belgium)
  • Seattle (USA)
  • Los Angeles (USA)

Thus, in addition to being the world’s largest exporter and second-largest importer, in addition to controlling a fifth of the world’s container fleet through giant state-owned lines, and in addition to building 41% of the ships built in 2012, it’s going to control a significant percentage of the global shipping routes. Moreover, in addition to the mainland China stake in the above ports, privately owned conglomerates in China and Hong Kong – including Hutchison Whampoa, China Merchants Holdings, and China Shipping Terminal, are also buying stakes in global ports. These firms also own stakes in Suez, Terminal Link, and a forthcoming port in Tanzania.

In other words, at the end of the day, China will have a stake in every step of the global (Consumer Purchased Goods) supply chain. It will supply at least some of the raw materials (as it controls some global markets, such as rare earth metals where close to 90% come from China), make some of the parts, assemble one or more subcomponents, ship it from a port it controls, on a ship it built, to a port it controls — where the goods will be unloaded using equipment where components came from China, put on a truck where the steel came from China, and delivered to the store where a China Conglomerate owns a minority stake. We might as well just accept the reality and form the Alliance today. Why wait?