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Exporters bear bitter upshots of US credit crisis

18
Apr '08
US credit crisis has played its part in dampening the enthusiasm of thousands of Chinese exporters, who are pessimistic about the ongoing biannual Canton fair being held in Guangzhou City of Guangdong Province.

Although, it is still too early to predict the outcomes of the exhibition, domestic manufacturers and traders have witnessed a sluggish growth in the orders placed by purchasers. Infact, some of them have also witnessed a drop in their business compared to the previous year.

Cao Xiaojian, Vice Chairman of Jiangsu Shuntian Co Ltd stated at the fair that export orders in the first quarter of 2008 surprisingly fell to as low as 20 percent from 140 percent in the same period of last year.

On the other front, the unbridled rise in yuan has done the remaining bit to make matters worse. With every one percent increase in the currency, sales profit of the manufacturers and traders would witness a drop of 2-6 percent. Nearly a quarter of factories under the largest Chinese textile enterprise have been devastated by such vicious circumstances.

Experts have observed that the most ravaging effects are the consequences of lower external demand on small and middle enterprises. Reports brought in by industrial sources show that of the 100 clothing manufacturing units in Zhoucun District, only 70 commenced operations after the Spring Festival this year.

Statistics show, that the increase in exports of machinery products slowed to 18.9 percent in 2007, down from 26.4 percent in 2006. Growth is likely to slow even further this year.

Starting from January to March this year, total exports of China rose by 21 percent to US $206 billion, 6.4 percentage points lower than the previous year.

Although exports to US grew 5.4 percent to 53 billion yuan, it was still 15 percentage points lower than the same period last year.


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