This study aims to investigate the availability and performance of different types of supplier in China.
The analysis is based on a survey of the purchasing behaviour of 75 western firms with manufacturing facilities in the eastern seaboard region of China and 167 separate supply relationships with foreign‐invested and indigenous Chinese suppliers.
The results suggest that, while the availability of indigenous suppliers is limited, private Chinese enterprises have the flexibility and potential to perform well if both the supplier and buyer are willing to make significant investments, especially in the areas of workforce training and quality procedures.
Firms should treat state‐owned enterprises with caution, carefully considering whether they have the willingness and flexibility to respond to investment.
This should prove beneficial to both supplier and buyer companies based in China, both now and in the future.
