China’s bicycle industry
According to the Chinese Cycling Association, Secretariat, the latest statistics, in 2008, the general situation of China’s bicycle industry is the production growth rate increases down, pushing the cost of high value, profit growth is limited, amount of funds used to increase.
Bicycle export situation emerged for the first time since 1996, decline in total annual exports of 56.58 million, down 4.5%; electric bicycle faster export growth, in 2008, the country exported 587,000 electric bicycles, up 38.3 significantly increased % of total exports break through 100 million U.S. dollars, reaching 180 million U.S. dollars. China’s bicycle industry, a large province include Tianjin, Shanghai, Jiangsu, Zhejiang and Guangdong provinces and municipalities is a major production base.
The major factors restricting China’s bicycle industry is as follows:
First, the RMB appreciation pressure on the bicycle industry. Cycling Association, Guangdong Province, Deputy Secretary-General HE Xiao-hua said if the January 2006 exchange rate of 8.07 yuan basis of the calculation, the current RMB exchange rate already exceeded 7.4, in accordance with a bike’s total exports in 2006 budget, the loss of the entire industry has been reached 1 billion yuan.
Second, the export tax rebate cut on the bicycle industry pressure. Ministry of Finance in July this year, the abolition of the “high energy consumption, high pollution, resource-based” products of export tax rebates, reducing the easily lead to trade frictions in commodity export tax rebate rate. Some bicycle export enterprises are relying on export tax rebate to make a profit, and some even posted some of the costs into the export tax rebate rate has dropped 4% after the economic efficiency of enterprises had a big pressure.
Third, the EU anti-dumping on the bike generated pressure. China’s bicycle exports to the EU starting in 2005 on the downward trend: In 2004, China exported to the EU bike 3.1221 million in 2005, exported 2.4168 million in 2006, exports of 1.55 million in 2007, 1 September exports of 108 10000. The EU needs are in the high-end products, the export profits of China’s bicycle industry, the upgrading of great significance, their anti-dumping policy to China’s bicycle industry, causing enormous losses.
Fourth, prices of raw materials to the bicycle industry pressure. The current international and domestic steel prices were rising, steel prices on the impact of cycling material costs, if calculated on a 24-inch bike, then a ton of steel price rises 400 yuan, an increase of 6 yuan per vehicle cost of materials. Bicycle manufacturing industry profits have been squeezed, the remaining space is small, and the more low-end bicycles and profits lower. In the current bicycle manufacturing enterprises to reduce the cost of space is left, if raw material prices continue into the first half of 2008 will inevitably lead to the industry reshuffle.
5 is a rise in labor costs, pressure on the bicycle industry. The past two years, the domestic price increases the labor force is very clear that the production enterprises, labor costs rose only an average wage, not including social security funds, medical funds, which one, if not increase, then bound to have a low thin bicycle company cause great profit margins squeezed.
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