Strategy & Business magazine has an interesting article on the shan zhai manufacturers in China at the moment. It’s the first business press article I’ve seen in the US that takes a relatively balanced approach to reporting on them. It’s worth a read, as it’s a trend that’s already affecting business, particularly the electronics business. It suggests a new approach to economic recovery as well, one based on small companies well-networked with each other.
I first learned about the shan zhai on a recent trip to Shenzen, China, hosted by PCH International and Bunnie Huang (Bunnie’s got a good blog post describing the shan zhai). The popular image of these companies in the US is that they’re producing cheap knockoff goods based on established multinationals, but there’s more to it than that, as S&B and Bunnie point out.