But the road to lower resource costs by sourcing from China or India is also paved with potential pitfalls. Among them, longer start-up times, lengthy and more complex supply chains, downtime caused by energy shortages, negative publicity from laying off workers in home country, and poor record on enforcing intellectual property laws. Despite all these concerns, every manufacturer needs to develop a global supply strategy, using China and India, by answering the following four (4) questions: What opportunities and challenges does China/India pose to your company? Sell to them? Buy from them? Compete with them? Outsource business processes or manufacturing and distribution? How to best capitalize on opportunities in China/India? Through purchasing, sales or product engineering? Use Local Partnership (JV)? Direct investment? Who are the right players? What are the risks and costs in managing an extended supply chain? Cost of transport? Excess or buffer inventory? Increased time to market? Best practices for managing logistics? Use of 3rd-party logistics? How can you manage information in a supply chain that spans the globe? Key performance indicators (dashboard)? Use of Information Technology?  Role for trusted 3rd-parties? Intellectual Property protection? Everyday we hear how fast China’s economy is expanding, so what impact does it have on the US economy and vice versa? Given US is the largest economy in the world and the largest importer, and China is the 2nd largest exporter, its growing exports are shifting the profile of US imports. US imports have grown steadily over the last 15 years at about 9% (CAGR, since 1990) and is expected to exceed $2 Trillion annually, by 2008. All this time, interestingly about 50% of the total US imports came from Canada, Mexico, Japan and China (see chart), while the mix has shifted significantly in favor of China.  China is already the 2nd largest exporter to the US, and at the current rate it will become the leading exporter to the US by the end of 2007 (at $340 B/yr.) surpassing Canada. Since implementation of NAFTA (1994), US imports from Canada and Mexico have grown by 10% (CAGR).  On the other hand, since China’s entry into the WTO (2002) its US imports from China (and its total exports) have grown annually by 24% (CAGR). Meaning China is more aggressive in trading with US.