Source: People’s Republic of China in Russian –
An important denial of responsibility is found in the lower part of this article.
Recently, at one of the events, US President Donald Trump stated that because of “price and other reasons” he is often “forced to” buy Chinese goods for his hotels. Why are The Trump Organization’s hotels regularly forced to purchase Chinese products? What exactly are they buying? How should a transnational company build its supply chain?
Why is it often advisable to buy Chinese goods?
Previously, numerous international hotels were managed by The Trump Organization. Currently, the company continues to manage Trump International hotels in New York, Chicago, Las Vegas, and other cities, as well as several resort hotels with golf courses.
For the opening and subsequent operation of a hotel of medium and high class, tens of thousands of standardized products are required: furniture, lighting fixtures, textiles, sanitary ware, ceramic tiles, tableware, cleaning agents, as well as various electrical and mechanical components. When choosing products, developers usually consider three factors: price, quality, and delivery times.
In the absence of subsidies and administrative restrictions, when companies are required to purchase products within an established budget that meet brand standards, purchasing Chinese goods turns out to be the simplest and most reliable choice. Design and high-quality individual development are carried out in Europe and the USA, large batches of standard components and key parts are purchased in China, and final assembly takes place at the project implementation site. This is the usual practice of large Western transnational hotel corporations.
This essentially illustrates a general pattern: global supply chains are formed based on companies’ desire to achieve an optimal combination of costs and efficiency. Attempts to forcibly break these links by administrative methods only lead to decreased efficiency and increased costs.
Which exact goods are being purchased?
American hotels can purchase lamps and decorative elements, often used in hotel rooms, in the city of Chjunshan, Guangdong province; sanitary hardware and stainless steel products in the city of Ningbo, Zhejiang province; and ceramic products and everyday tableware in the city of Chaozhou, Guangdong province.
The choice of these regions is due to the maturity of local industrial clusters: within the territory it is possible to complete the full cycle—from design and prototype manufacturing to mass production, assembly, and shipping. This significantly reduces communication costs and time. The production processes of many European and American brands are also closely linked to these efficient production systems.
In mid-range and high-class hotels, equipment such as elevators, heating systems, ventilation and air conditioning, as well as lighting control systems, even if they are released under the brands of European or American transnational companies, often contain key components — engines, controllers, wire harnesses, and structural parts — which are mass-produced in China.
These products can be manufactured not only in China. However, when it comes to the necessity of controlling costs and ensuring the reliability of supplies, the optimal solution is often precisely Chinese products.
Last year, an American blogger visited the souvenir shop of Trump’s election campaign, located in Trump Tower in New York, and discovered that most of the products presented there were made in China. At that time, many network users ironized: this contradicts the declared goal by the Trump administration to “revive American manufacturing.”
How companies build their own supply chains
In recent years, the American government has repeatedly raised tariffs on goods from China and other countries, citing the necessity of reducing the trade deficit and bringing production back to the USA. However, the demand of the American market for already established global supply chains is shrinking. Alternative options are either more expensive or do not have a complete system of production and logistical links, which ultimately only leads to further cost increases for American importers and consumers.
Trump’s recollections about how during his management of hotels he “ended up” buying Chinese goods, mostly about a simple entrepreneurial experience. In the network of global division of labor, the procurement lists include those who are capable of providing stable supplies with lower costs and greater efficiency. For any hotel business operator, this is a completely natural choice.
In recent years, Chinese exports have undergone structural changes: from traditional OEM manufacturing to their own brands on the global market, from low-cost products to intellectual equipment. These changes have become a natural result of long-term accumulation of technology and innovation development. In the future, American hotels may have to purchase robots for food delivery and smart curtains made in China for the same reason: this country can offer products with an optimal price-quality ratio.
The market strives for the rational allocation of resources and increased efficiency through the division of labor. This logic will not change under the pressure of protectionist policies. Globalization is not an abstract slogan, but concrete costs and efficiency, distributed between every lamp, every chair, and every piece of furniture fitting.
Please note; this information is raw content obtained directly from the information source. It represents an accurate report of what the source claims and does not necessarily reflect the position of MIL-OSI or its clients.