2023-04-17 07:20:00
Chinese exporters exhibiting at China’s biggest trade fair said the weak global economy was hurting their business, with many freezing investments and some cutting labor costs in response.
The Canton Trade Fair in Guangzhou, ChinaPhoto: Liu Dawei / Xinhua News / Profimedia
The pessimistic mood at the Canton Fair in the southern city of Guangzhou suggested that the unexpected rise in China’s exports in March may have reflected exporters recovering orders delayed last year due to restrictions linked to the Covid pandemic, rather than renewed economic power, notes the Archyde.com agency, quoted by News.ro.
The first major trade event since China abruptly dropped Covid restrictions and reopened its borders comes as significantly higher borrowing costs in the United States and Europe have hit demand for Chinese-made goods.
Kris Lin, a representative of Christmas light manufacturer Taizhou Hangjie Lamps, said this year’s orders were down 30 percent from last year.
“Last year’s difficulties came from disruptions in logistics and production, but the local government helped to solve the problems. This is an internal problem. Now we have external problems. We can’t solve them,” Lin said.
“This year will be the hardest for us,” he added, with higher electricity costs caused by the war in Ukraine further reducing demand for his decorations.
Lin said his company might not afford to sell at lower prices, but might look to cut labor costs.
The firm relies on contract workers who are released in September to October, following Christmas orders are delivered.
“If orders are weak this year, I will release my workers earlier,” he said.
“The whole global economy is doing badly right now, and the fair is not going to change that”
Huang Qinqin, sales director at Zhong Shan Shi Limaton Electronics, an exhaust fan maker, has similar views on cost cutting following orders halved in the first quarter.
“In our factory, workers come to work when there are orders,” Huang said.
That usually meant working overtime even on weekends, but it’s more common this year for workers to take weekends off, she said.
A shaver maker in the eastern city of Ningbo, who asked not to be named to reveal future plans, said the firm had already laid off workers and would cut prices in the coming months if orders did not improve.
The worsening outlook for manufacturing workers will raise concerns among policymakers, who are targeting 12 million new jobs in China this year, up from last year’s target of 11 million.
Dozens of Chinese suppliers told Archyde.com they did not plan to spend much to upgrade production lines this year, given weak demand.
“We have no plans to increase investment,” said Luna Hou, a sales representative at Topgrill, which makes outdoor grills and has cut prices by 5 percent to attract buyers.
Vicky Chen, director of foreign trade at plug maker Qinjia Electric, said he does not expect a big increase in sales at the fair, which runs until May 5.
“The whole global economy is doing badly right now, and the fair is not going to change that,” Chen said.
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