Global Sources Ltd. released a survey showing that 45 percent of professional buyers see an improvement in the quality control process in mainland China. While mainland China continues to offer buyers very competitive prices, buyers expressed concern about other areas including product design and English language communication skills.

Commenting on the survey findings, Merle A. Hinrichs, Global Sources chairman and chief executive officer said, “China suppliers are beginning to compete more directly with Hong Kong and Taiwan in terms of quality control. But clearly there are still some areas of concern that mainland suppliers need to address. The survey also indicates that there are areas where Hong Kong and Taiwan maintain important competitive advantages as key sourcing centers.”

According to the survey results, prices of products from mainland China remain significantly lower than the same products sourced from Hong Kong or Taiwan. Forty-eight percent of buyers said prices of products from mainland
China were between 11 percent and 50 percent lower than similar products from Hong Kong. Compared to Taiwan, 53 percent said prices on the mainland were
between 11 percent and 50 percent lower.

The survey generated 571 valid responses from buyers worldwide and showed
that while certain factors in mainland China production and export ability
show signs of improvement (see brief case studies provided by Global Sources
below), the mainland still trails Hong Kong and Taiwan in several important
areas. Fifty-three percent of respondents noted that overall manufacturing
quality of mainland China was lower than in Hong Kong and Taiwan while 36
percent said design and material substitutions were problem issues.

English language communication is an area where mainland China suppliers
scored the lowest. Forty seven percent of buyers said that mainland suppliers'
English language skills are worse or much worse that suppliers in Hong Kong,
and 39 percent said the skills were worse or much worse than suppliers in
Taiwan.

This online survey is the third in a series of surveys conducted by Global
Sources. The previous two surveys have separately examined the views of
overseas buyers, and Hong Kong and Taiwan suppliers towards the competitive
advantages of those two supply markets.

The China survey was conducted from December 23, 2003 to January 2, 2004,
and was carried out among volume buyers who source a wide variety of products
from mainland China, ranging from electronics and computers, to toys, gifts
and home appliances. Respondents were asked to rate key aspects of sourcing
from mainland China as compared to sourcing from Hong Kong and Taiwan.

Select survey results are available online in PowerPoint format at
http://www.corporate.globalsources.com/INFO/PRESS/2004/DOWNLOAD/CNBUYER.PPT