Chinese suppliers turn away from EU to emerging markets
ProcurementLeaders.com - Nov 30th 2011, 09:58
Suppliers in China are boosting overseas shipments to emerging markets amid slowing orders from the EU as the region tackles its debt crisis, market experts have reported.
According to a survey of 581 exporters by Global Sources, in the months ahead, 42% of respondents expect to strengthen their footholds in South and Latin America, the Middle East, Africa, Eastern Europe and the Asia-Pacific region.
Suppliers were found to be "particularly optimistic" about markets in Asia, mainly because of China's free trade agreement with many countries in the region. Close to 20% of interviewed companies plan to increase their presence in the China domestic market, as consumption has been on the rise, due in part to favorable government policies.
"China suppliers are already taking proactive measures to sustain their export business in view of slowing orders from Europe," said Craig Pepples, Global Sources' president of corporate affairs.
"The majority of surveyed suppliers said their exports have been impacted by the debt crisis. Companies are cautiously optimistic about sales in 2012, with more than 60% expecting stable or higher export sales from their Europe business in the year ahead."
In addition the poll shows suppliers are taking other measures to cope with falling orders from Europe with 15% intending to speed up the release of new products, while 11% of exporters plan to cut production costs to boost profitability. Some 10% said they are planning to increase R&D spending as they strive to improve product offerings.
Nearly all respondents have felt the effects of Europe's debt crisis on exports. In addition 35% of companies report significant impact, while almost 60% said there has been some impact.
The survey was conducted in November 2011, with a total of 581 suppliers interviewed from various industries, including home products, electronics, hardware and DIY, gifts and premiums, garments and textiles, solar and energy-saving products, and electronic components. Nearly half of the respondents are based in Guangdong province, while the rest are from Zhejiang, Jiangsu and Shanghai.
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