China Suppliers
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by: lucasmarcello
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Date: Thu, 5 May 2011 Time: 5:07 PM
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Chinese exports are recovering from the global financial crisis, although the Chinese suppliers are being careful with their exports this year, according to a Global Sources' report.
Global Sources conducted a survey in which 64 percent of 551 China exporters who were interviewed reported that there has been some recovery in their overseas sales and 8 percent reported a strong recovery. But of the 551 exporters who interviewed only 11 percent reported that there hadn't been any rebound in their sales overseas yet. The Chinese suppliers are demonstrating a considerable rebound in part because the orders from the US and the EU have started to increase according to the chief operation officer of Global Sources.
It was also indicated by the survey the Chinese suppliers were very optimistic about their overseas sales because although 13 percent anticipated no change in their sales, 4 percent saw a reduction in their sales, and 83 percent saw an increase in their sales.
But the Chinese suppliers usually underestimate the projections of their increase in sales. Over half of the suppliers in China believed that their sales would increase and predicted increases sales of about 5 percent to 15 percent. These Chinese suppliers also indicated that:
? 17 percent of the suppliers in China anticipated their sales overseas would increase by as much as 25 percent.
? 16 percent of the suppliers in China expected increased sale of about 16 percent to 25 percent.
? 19 percent of the suppliers in China anticipated increases sales of about 11 percent to 15 percent.
? 38 percent of the suppliers in China predicted an increase in sales of about 5 percent to 10 percent.
? 10 percent of the suppliers in China forecasted increased sales by at least 5 percent.
It was also indicated by this survey that there is an increase emphasis on the traditional export markets in the US and the EU. During 2009, there were several Chinese suppliers who began to explore emerging markets that helped the suppliers in China reduce their losses since there was a reduction in orders from conventional destinations.
But, in the first half of 2010 the suppliers in China started to shift their emphasis back to the US and the EU according to Global Sources. This is compared to the second half of 2009 when 23 percent fewer respondents of the survey reported that they intended to target other emerging markets in nations that are non EU. In comparison, 17 percent more suppliers in China reported that they intended to concentrate on the markets in the US, Canada, and the EU.
The suppliers in China have reported that despite the positive economic outlook, the buyers are as much worried about price as they were during the height of the financial downturn. This is providing additional pressure to the suppliers in China's profit margins. But, buyers are still having a difficult time dealing with the additional costs. Because of the rebound of export sales, the costs of raw materials and labor are increasing.
Some of the problems that the suppliers in China suppliers faced included:
? 34 percent of the Chinese suppliers reported that the competition of price was their main concern.
? 25 percent of the Chinese suppliers reported that increased labor and raw material were a primary concern.
? There were fewer sales because of instable labor conditions, trade protectionism, and labor shortages.
The 551 suppliers in China were interviewed by market analysts from Global Sources were from the telecom, fashion accessories, garments, textiles, hardware, sports equipment, and security products industries. 50 percent were from the province of Guangdong, about 33 percent were from Zhejiang, and 9 percent of the respondents were from Fujian.
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