Exporters striving to crisis
It is unnecessary for cookware seller Qu Yanpeng to know the impact brought by the global financial crisis through newspaper or TV. She could tell from the lack of visitors to her booth at a recent trade fair.
Qu, a sales manager for well-known Chinese cookware brand Supor, said that compared with previous occasions, the number of clients she had this year on the first day of Canton Fair reduced by 80%.
Cloyce D. Palmer, a buyer of agricultural equipment from the United States also said that business people from US were absent from China’s largest trade fair. What is more, he had no plans to buy anything this year, since US distributors cancelled their orders before his trip.
This reflects how China’s manufacturing sector is affected by the impact of the financial crisis as demand from developed economies reduced. Exports are still robust but the growth rate has declined. It is said that the crisis may spread to non-financial sectors.
According to statistics released by the National Statistics Bureau, China’s foreign trade reached $1.97 trillion for the first three quarters, up 25.2 percent year-on-year. However, the 22.3 percent year-on-year export growth is 2.8 percentage points lower than last year.
Wang Zixian, a researcher with the Ministry of Commerce, estimated that actual export growth for the first three quarters has actually declined to single digits if other factors such as export price increases and exchange rates are taken into account. “This is a big risk for a country like China that is heavily dependent on exports,” Wang said in a recent interview. “The fundamentals of the macro economy will get hit if there is an impact on exports.”
The authorities have done something to maintain the stability of export growth. On Sunday, export tax rebates increased for more than 3,000 products, including textile and garments, the worst hit, and high value-added electrical and mechanical products.
Another choice for worried entrepreneurs is to the still robust domestic market.
Retail sales rose 22 percent to 7.79 trillion yuan in the first nine months, up 6.1 percentage points year-on-year.
Therefore, life is not so difficult for firms with a large domestic market. Qu from Supor said that although the exports have been influenced, the firm’s overall business will not suffer much because its major market is in China. According to the company, its domestic sales soared 36 percent in the first half of this year, while exports rose 15.9 percent.
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