AI data for Q3 2016 in China shows increased audit and inspection demand, at +12.6% compared to Q3 2015, consistent with the economic rebound China has displayed recently. Indeed, latest manufacturing PMI data for September shows a sustained growth at 50.4.

1. CHINA GROWTH STABILIZING AS EXPLODING
BATTERIES AND FACTORY FIRES PLAGUE
SUPPLY CHAINS
ASIAINSPECTION Q4 BAROMETER

2. HONG KONG, OCTOBER 6, 2016
ASIAINSPECTION (AI)
A LEADING GLOBAL QUALITY CONTROL AND COMPLIANCE SERVICE PROVIDER
THAT PARTNERS WITH BRANDS, RETAILERS AND IMPORTERS AROUND THE WORLD
TO SECURE, MANAGE AND OPTIMIZE THEIR SUPPLY CHAIN
today announces its 2016 Q4 Barometer, a quarterly synopsis
on outsourced manufacturing and the quality control services industry.

3. CHINA DISPLAYS ECONOMIC REBOUND IN
AUGUST AND SEPTEMBER
Demand for product inspections grew by 12.6% in Q3 2016 YoY
September’s manufacturing PMI data shows a sustained growth at 50.4,
while export PMI signals the first expansion since April
+12.6%for China
in Q3 2016

4. OUTPUT AND LOCAL CONSUMPTION
KEEP CLIMBING
In August 2016, China’s industrial output grew +6.3% YoY,
fastest in five months, while retail sales climbed 10.6%
Local demand for inspection and testing surged by 8% YoY
+6.3%
+10.6%
+8%
INDUSTRIALOUTPUT INSPECTIONANDTESTING RETAILSALES
August2016

5. CHINA’S FOREIGN TRADE SHOWS
PROMISE, BUT COMPETITION STEEP
September’s PMI data indicates increase in new export orders
Pressure on exports comes from rest of Asia

6. CHINA’S FOREIGN TRADE SHOWS
PROMISE, BUT COMPETITION STEEP
Textile, footwear, accessories inspections climb in competing countries
+80%INDIA
+40%
+14% THAILAND
INDONESIA

7. CHINESE FOOTWEAR MANUFACTURERS
THREATENED BY VIETNAM
Vietnam’s footwear inspections up 49% in Q3 2016
Chinese manufacturers concerned about Vietnam’s pressure
on their share of footwear exports to the US
+49%for Vietnam
in Q3 2016

8. EXPANSION OUTSIDE RMG AND TEXTILE
2016 YTD demand for product inspection shows strong upward trends in:
Electrical and Electronic items: +18%
Printing and Packaging: +48%
+18%
ELECTRICAL AND
ELECTRONIC ITEMS
+48%
PRINTING AND
PACKAGING

9. SAFETY RECALLS: PHONE BATTERIES,
LEAD & PHTHALATES CONCERNS
E&E product inspections in Asia up 19% YTD 2016
High-profile E&E problems: 2.5 million Samsung smartphones
recalled for exploding battery concerns
2.5MSamsung phones
recalled

10. SAFETY RECALLS: PHONE BATTERIES,
LEAD & PHTHALATES CONCERNS
Lead and phthalates still frequently found in US consumer product
imports: toys, water bottles, garden products, jewelry, etc.
Among products tested by AI labs in 2016, 8.6% failed for phthalates
content under California Prop 65
8.6%failed for
phthalates

11. STRUCTURAL SAFETY:
RISKS HIGH IN BANGLADESH AND BEYOND
Tampaco packaging factory fire named Bangladesh’s worst industrial
disaster since Rana Plaza
NGOs emphasize the need to expand safety initiatives beyond RMG
and past the end of Accord and Alliance in 2018

12. STRUCTURAL SAFETY:
RISKS HIGH IN BANGLADESH AND BEYOND
Structural audits reveal high numbers of factories at
Major and Critical risk across Asia
Vietnam 52.1% China 51.9% India 51.1%
Major risks also identified in Indonesia, Pakistan, Kenya, Egypt

13. INDUSTRY VS. ENVIRONMENT:
CHINA’S POLLUTION LEVELS CRITICAL
Textile and apparel named China’s top polluting industries
New anti-pollution measures may put up to 90% textile
factories at risk of closure

14. INDUSTRY VS. ENVIRONMENT:
CHINA’S POLLUTION LEVELS CRITICAL
China’s ground water quality worsening for 5th
consecutive year
AI data showed 73.9% textile factories in China at “Major Risk” and
26% at “Critical Risk” on waste and pollution concerns (both figures
higher than industry average)
73.9%
AT “MAJOR RISK”
26%
AT“CRITICALRISK”

15. FOOD SCANDAL SHOWS ROOM FOR
IMPROVEMENT IN CHINA’S FOOD SAFETY
1,000 tons of tainted meat worth $12.3 million seized in Guangdong
Food safety remains a challenge in China despite harsher punishments
under new Food Safety Law
AI data shows food inspections up +17% YoY and +32% quarter-over-quarter
+32%Q32016vsQ22016

16. AsiaInspection (AI), a leading global quality control
and compliance service provider
that partners with Brands, Retailers and Importers around the world
to secure, manage and optimize their supply chain.
ABOUT ASIAINSPECTION
YOUR EYES IN THE FACTORY!™

17. ABOUT ASIAINSPECTION
YOUR EYES IN THE FACTORY!™
DEDICATED ACCOUNT MANAGER
A supply chain partner
offering advice on your specific needs
INDUSTRY LEADING TURNAROUND
Onsite within 48 hours.
Reports the same day 80% of the time
COMPREHENSIVE ONLINE MANAGEMENT
Use your real-time dashboard
to benchmark and identify
your high performing suppliers
FLEXIBLE
Cancel or modify orders up to 4pm
the day before the inspection for free
PRODUCT EXPERTISE
Hundreds of off-the-shelf customizable
product specific checklists
TRUSTED AND TRULY INDEPENDENT
100% QC. AI is not involved in sourcing
and protects your factory information
MOBILE
Book, check reports
and make decisions on the go
ALL-INCLUSIVE PRICING
Easy to budget. No hidden costs

18. FOOTNOTES
1. http://www.bloomberg.com/news/articles/2016-10-02/china-factory-gauge-at-2-year-high-eases-pressure-for-stimulus
2. http://www.bloomberg.com/news/articles/2016-09-13/china-economy-strengthened-as-factory-output-retail-strengthen
3. http://www.cnbc.com/2016/10/01/china-official-manufacturing-pmi-shows-factory-activity-continued-apace-in-september.html
4. http://www.fibre2fashion.com/news/company-reports-news/china-s-textile-imports-to-eu-slide-in-2015-190543-newsdetails.htm
5. http://footwearnews.com/2016/business/uncategorized/fdra-footwear-factory-management-report-251461/
6. https://www.theguardian.com/technology/2016/sep/16/us-regulators-issue-official-recall-samsung-galaxy-note-7-phone
7. http://www.usnews.com/news/news/articles/2016-07-20/ll-bean-recalls-kids-water-bottles-over-lead-concerns
8. http://wfla.com/2016/06/03/childrens-toy-jewelry-kit-recalled-due-to-high-levels-of-lead/
9. http://www.al.com/business/index.ssf/2016/08/mm_branded_jewelry_recalled_du.html
10. http://www.foodsafetynews.com/2016/08/six-brands-of-turmeric-added-to-recall-for-excessive-lead/#.V-5lotQrLDc
11. https://chemicalwatch.com/48168/us-ngo-finds-lead-phthalates-in-garden-products
12. http://www.dhakatribune.com/bangladesh/2016/09/26/tampaco-fire-another-body-recovered/
13. http://www.wsj.com/articles/labor-groups-call-on-bangladesh-to-improve-industrial-safety-1473611689
14. http://www.ecotextile.com/2016090922333/materials-production-news/bangladesh-to-establish-textile-sector-safety-body.html
15. http://chinawaterrisk.org/wp-content/uploads/2016/08/China-Water-Risk-Brief-Todays-Fight-for-the-Future-for-the-Future-17082016-FINAL.pdf
16. http://www.scmp.com/news/china/society/article/2022472/appalling-air-quality-beijing-takes-deep-breath-smog-season-sets
17. http://time.com/4498998/china-meat-food-safety-bleach-police-guandong-shenzhen/