Today, like the weather, everyone talks about China. But while there's nothing you can do about the weather, the same is not true for China. At least that was the message from a presentation at last week's Glass Build America by Garth Hedley, a market analyst for glass with the International Finance Corp. which is part of the World Bank.

In a session on the economic importance of flat glass production in China and other emerging markets, he assessed the impact of globalization on the U.S. market.

He pointed out that the cost of building a float plant in China is 40 to 50 percent what it would be in the U.S. because the engineering knowledge is available at such a lower cost.

He also explained that while China produces, by weight, 33 percent of world flat glass volume, it has only 10 percent of world value, which means that what is being produced has little value added. It represents a large opportunity for Chinese manufacturers in the domestic market but is a threat to the world producers because that value-added production could then be exported, he stated. Chinese importers of automotive glass have already been sued for illegal dumping. PPG Industries, Safelite Glass Corp. and Viracon prevailed before the U.S. International Trade Commission in their challenge against imported units coming into the country.

According to government statistics Hedley presented, 80 percent of float glass produced in the U.S. is fabricated and becomes value added. This means there is a huge gap (70 percent) between production in the two countries.

He also pointed out that because shipments of U.S. companies have grown at a slower rate than consumption, there is more glass being imported. He included Mexico as an emerging market that exports to the U.S.

The question you have to ask is why, when the product is bulky, there is just-in-time delivery, customization, and other factors that would seem to be against import, are customers in the U.S. increasingly buying from China, Hedley said. He used insulating glass as an example but imports of this fabricated product from China are very small. Whereas when he used rearview mirrors for cars, imports are very high.

He said that trends show float glass will be less impacted by Chinese imports because of the bulkiness of shipping such low-value product while the same will not be true for value-added products.

He said there is more concern for U.S. exporters than importers because exports are declining and there needs to be a better understanding of why this is happening.

Innovation is the key in this situation, he told his audience. A company has to be innovative and new products have to be brought out that take time to replicate to give domestic fabricators an advantage.

His final word: Analyze the reasons why the decisions made on imports by the buyers of foreign products are being made.