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CHaINA Novemeber/December 2007 Cover StoryNovember/December 2007CHaINA Magazine

Pilar Dieter, Alaris Consulting

A relative newcomer to the China supply chain scene, Pilar Dieter is already established herself as one of the industry’s most sought after speakers at many supply chain and logistics-focused conferences that take place in China throughout the year. This year she played host to one of World Trade magazine’s much publicized (and much listened to) inaugural webinars on China logistics that took place in Shanghai where senior officials from ports around the world convened to discuss opportunities in China’s port and logistics environment.

Pilar Dieter currently serves as a director for Alaris Consulting’s China organization with a focus on logistics, global trade management, and technology for foreign companies in China. She has more than 10 years of industry expertise serving companies’ supply chain divisions through software implementations and business process re-engineering efforts, having previously spent time working for Accenture, TradeBeam, and Embarcadero Systems Corporation, where she worked with ocean ports and rail terminals in innovating next generational solutions to streamline global logistics processes active in major ports around the world today.

Pilar is at the cutting edge of solving supply chain logistics and distribution problems in Asia.

When asked if there had been any developments in China supply chin this year that had been of disappointment to her, Pilar answered that the “semantics related to trade disputes with China” had been a low-point. “There is a gaping hole in adequate supplier quality assurance that exists among the growing number of suppliers worldwide. Product safety and quality is undoubtedly of utmost importance in the success and reliability of global trade on all levels, however the responsibility of faulty product does not rest solely on the manufacturer.”

The VAT Rebate

In July this year the central Chinese government cut export rebates for about 37 percent of export categories and the effects are still being felt. As Pilar Dieter of Alaris Consulting says, “The trickle down effect of the VAT adjustment, as well as the other cost inflation events of 2007, naturally left suppliers feeling pressure of margin erosion of their manufactured goods and buyers feeling the squeeze of price hikes due to suppliers losing these rebates. As China continues to push higher skilled manufacturing, the incentives for low cost country sourcing in China for low end commodities will not vanish completely, but the way in which low-cost country sourcing is viewed will take a turn.”

R&D

Early estimates at the beginning of 2007 that China was poised to overtake Japan as the world’s second R&D spender globally turned out to be overcooked. What is certain however is that more and more companies are investing in R&D in China than ever before as things for he first time slowly start to move from “Made in China” to “Made by China”.

Rail Freight

There have been some interesting developments this year in the development of rail freight as serious low-cost alternative for moving goods across China. It’s all part of the central Chinese government’s plan to invest a staggering US $200 billion in the country’s railroads over the next three years. This year also saw the opening of the first privately unvested rail line in China, linking Quzhou and Changshan in east China, a move which Pilar Dieter says, “signified the first step towards China’s reform in financing railway construction.” Hopefully the trend will continue going forward.

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