Seems like in the past six months, when it comes to American companies off-shoring their manufacturing or buying their raw materials from foreign suppliers, the news coming out of China is all bad. If it's not tainted pet- and/or human-food ingredients, it's the “lead-based painted toys” story du jour.

So, you'd kind of think that US companies in particular might be rethinking any plans they have to move more manufacturing offshore—especially to China. Sorry, that's not the case, based on a new study by consultancy CapGemini (www.capgemini.com) and distribution provider ProLogis (www.prologis.com). Almost 350 companies, primarily from the Americas, Europe and Asia-Pacific, participated in the research specifically into the advantages and disadvantages of offshoring to China and India.

Some of the important conclusions:

1. Despite popular opinion, moving operations to China and India has had a limited impact on the corresponding Western operations. It is not a 1:1 ratio. For example, by offshoring manufacturing to China, only 32 percent of the companies polled had closed existing Western plants; for India, only 16 percent closed Western factories. The concept of ruining your corporate reputation in the US over this issue seems to have lost much of its stigma.

2. Companies are more successful in offshoring to China than to India. Five out of six that have moved operations to China have achieved or outperformed their expected benefits compared to only 43 percent for new Indian-based manufacturing. This may be only that India has a shorter history of offshoring than China and a little less experience in working with Western firms.

3. Companies are much more reliant on expatriates for managing their Chinese operations compared to their Indian operations. On average, 59 percent of all Indian ops are run by local management but only a third of such Chinese operations. It may be a government relations, language barriers and/or local customs, but a more hands-on approach to offshoring in China seems to be the rule.

4. Cost reduction is still the main reason that companies move activities to China or India. Over the next three years, those with plans to do so say they'll offshore 15 percent of their manufacturing to China and 13 percent to India. Cost-cutting needs may benefit India as price pressures are driving up wages in China, while the Indian government seeks to emphasize manufacturing over IT services.

So, to paraphrase Shakespeare, “To offshore or not to offshore?” That is the question that you, as converters, your suppliers and your customers will need to answer.