Trucks appear at a container terminal in the port of Qingdao in China’s Shandong province on April 28, 2021, after the tanker A Symphony and the bulk carrier Sea Justice collided outside the port, resulting in an oil spill in the Yellow Sea. REUTERS/Carlos Garcia Rollins/File photo
BEIJING, Sept. 15 (Reuters) – Chinese exporters are the last stronghold of the world’s second-largest economy as it battles the pandemic, sluggish consumption and a housing crisis. hard times await workers who are turning to cheaper products and even renting out their factories.
Last week’s trade data showed that export growth fell short of expectations and slowed for the first time in four months, raising concerns for China’s $18 trillion economy.read more
Alarms are echoing through the workshops of manufacturing centers in eastern and southern China, where industries ranging from machine parts and textiles to high-tech home appliances are shrinking as export orders dry up.
“As leading economic indicators point to a slowdown or even recession in global growth, China’s exports are likely to slow even further or even contract in the coming months,” said Nie Wen, an economist at Hwabao Trust in Shanghai.
Exports are more important than ever for China, and every other pillar of the Chinese economy is in a precarious position. Ni estimates that exports will account for 30-40% of China’s GDP growth this year, up from 20% last year, even as outbound shipments slow.
“In the first eight months, we had no export orders at all,” said Yang Bingben, 35, whose company makes industrial fittings in Wenzhou, an export and manufacturing center in eastern China.
He laid off 17 of his 150 workers and leased out most of his 7,500 square meters (80,730 sq ft) facility.
He’s not looking forward to the fourth quarter, which is usually his busiest season, and expects sales this year to fall 50-65% from last year as the stagnating domestic economy can’t make up for any weakness due to the fall. export.
Export tax rebates were expanded to support the industry, and a cabinet meeting chaired by Prime Minister Li Keqiang on Tuesday pledged to support exporters and importers in securing orders, expanding markets, and improving the efficiency of port operations and logistics.
Over the years, China has taken steps to reduce the dependence of its economic growth on exports and reduce its exposure to global factors beyond its control, while China has become richer and costs have risen, some low-cost production has moved to others, such as the Vietnamese nation.
In the five years before the outbreak, from 2014 to 2019, China’s share of exports in GDP fell from 23.5% to 18.4%, according to the World Bank.
But with the advent of COVID-19, that share has rebounded slightly, hitting 20% last year, in part as lockdown consumers around the world are snapping up Chinese electronics and homewares. It also helps boost China’s overall economic growth.
However, this year the pandemic has returned. His determined efforts to contain the COVID outbreak domestically have resulted in lockdowns that have disrupted supply chains and delivery.
But more ominous for exporters, they said, was a slowdown in overseas demand as the fallout from the pandemic and conflict in Ukraine spurred inflation and tight monetary policy that suffocated global growth.
“Demand for robot vacuum cleaners in Europe has fallen more than we expected this year as customers place fewer orders and are reluctant to buy expensive items,” said Qi Yong, a Shenzhen-based smart home electronics exporter.
“Compared to 2020 and 2021, this year is more difficult, full of unprecedented difficulties,” he said. While shipments are up this month ahead of Christmas, third-quarter sales could be down 20% from last year, he said.
It has reduced 30% of its workforce to about 200 people and could cut more if business conditions warrant.
The layoffs have put additional pressure on politicians looking for new sources of growth at a time when the economy has been disrupted by a year-long housing market downturn and Beijing’s anti-coronavirus policies.
Chinese companies that import and export goods and services employ a fifth of China’s workforce and provide 180 million jobs.
Some exporters adjust their operations to the recession by producing cheaper goods, but this also reduces revenues.
Miao Yujie, who runs an export company in east China’s Hangzhou, said he has begun using cheaper raw materials and producing low-cost electronics and clothing to attract inflation-sensitive and price-sensitive consumers.
British businesses have faced rising costs and weak demand this month, suggesting the risk of a recession is rising, Friday’s poll showed.
Reuters, the news and media arm of Thomson Reuters, is the world’s largest multimedia news provider serving billions of people around the world every day. Reuters delivers business, financial, national and international news via desktop terminals, global media organizations, industry events and directly to consumers.
Build your strongest arguments with authoritative content, attorney editorial expertise, and industry methods.
The most comprehensive solution to manage all your complex and growing tax and compliance needs.
Access unparalleled financial data, news, and content in customizable workflows across desktop, web, and mobile.
View an unrivaled portfolio of real-time and historical market data, as well as insights from global sources and experts.
Track high-risk individuals and organizations around the world to uncover hidden risks in business and personal relationships.
Post time: Sep-23-2022