China Suppliers
According to a report from Global Sources, while the exporters from China are being careful about their exports this year, China’s exports are recovering from the impact of the worldwide financial crisis.
According to a survey conducted by Global Sources, 551 China exporters were interviewed and 8% reported a strong recovery and 64% reported that there has been some recovery in their overseas sales. However, of those exporters interviewed only 11% reported that their overseas orders hadn’t yet seen any rebound. According to the chief operation officer of Global Sources, the exporters in China are showing significant rebound, partially because the orders from the European Union and the United States have begun to increase.
The survey also indicated that the suppliers in China had every reason to be optimistic about their sales overseas sales since 83% of companies received an increase in orders through 7/2010, while 4% saw a reduction in their orders and 13% anticipated no change is their sales.
However, exporters usually underestimate the projections of their sales growth. Over 50% of the Chinese suppliers expected their orders to grow and predicted and increase in sales of between 5% and 15%. The Chinese suppliers indicated that:
? 10% forecasted of the shipments increased by as much as 5%;
? 38% predicted between 5% and 10% increased in sales orders;
? 19% of Chinese suppliers anticipated between 11%and 15% growth;
? 16% expected expansion between 16% 25%, and;
? 17% of Chinese suppliers anticipated the orders overseas to increase by over 25%
The survey also indicated that there is a renewed emphasis on the conventional European Union and United States export markets. During 2009, there were many exporters who started to explore the markets that were emerging, which helped the Chinese suppliers reduce their losses because the orders from traditional destinations declined.
However, according to Global Sources, during the first six months of 2010, Chinese suppliers began to shift their emphasis back to the European Union and the United States. As compared to the second six months of 2009, 23% less respondents of the survey intended to target other markets that are emerging markets countries such as those that are non European Union. By comparison, 17% more Chinese suppliers reported they intended to concentrate on the markets in the European Union, Canada, and the United States.
The Chinese suppliers have reported that the purchasers are a sensitive to price as they were during the height of the financial downturn in spite the positive economic outlook. This is providing additional pressure to the Chinese suppliers’ profit margins. However, purchasers are still having a hard time taking on the additional costs. The costs of labor and raw materials are increasing because of the rebound in export orders.
Some of the difficulties that the Chinese suppliers faced included:
? There were fewer orders as a result of labor shortages, trade protectionism, and unstable economic conditions.
? 25% reported increased raw material and labor costs that were a major concern, and;
? 34% reported that the competition of price was their primary concern.
551 Chinese suppliers were interviewed by market analysts from Global Sources from the security products, sports equipment, hardware, textile, garments, fashion accessories, home products and the telecom between 01/2010 and 02/2010. 9% of the respondents were from Fujian, approximately 33% were from Zhejiang, and almost 50% were from the province of Guangdong.
Click here for more information about China suppliers and china mobiles. Author: James Keyes
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