Untangling the Knots in the New Silk Route

While China remains the world’s factory, some companies are starting to realize that the extraordinary margins they once enjoyed are steadily being eroded. Why? The rising costs of raw materials and labor only partially explain why a growing number of companies are opting to bring back part or all of the production that they had previously outsourced to China. More likely, the disjointed and inefficient supply chain between China and Europe is the bigger culprit. A study undertaken by the Port of Barcelona Chair of Logistics at the China Europe International Business School (CEIBS) in Shanghai analyzed the roles and relationships between all of the key agents and actors in this strategically important supply chain. This article highlights which aspects could be improved, and the authors recommend ways to enhance efficiency, in order for business people doing trade with China to reap the rewards without the headaches.