GUANGZHOU: Chinese exporters exhibiting their products at the country’s largest trade fair said the weak global economy was hurting their businesses, with many freezing investments and some cutting labour costs in response.
The subdued mood at the Canton Fair in the southern city of Guangzhou suggests China’s unexpected jump in exports in March may have reflected exporters catching up with orders delayed last year by COVID-19 curbs rather than renewed economic strength.
The first major trade event since China abruptly dropped COVID-19 restrictions and reopened its borders comes as sharply higher borrowing costs in the United States and Europe hit demand for Chinese-made goods.
Kris Lin, a representative from Christmas light producer Taizhou Hangjie Lamps, said this year’s orders so far are down 30 per cent from last year.
“The difficulties last year came from logistics and production disruptions but the local government helped solve the problems. That’s an internal issue. Now we have external problems. We can’t solve those,” Lin said.
“This year will be the hardest for us,” he said, with higher electricity costs caused by the war in Ukraine reducing demand for his decorations even further.
Lin said the company cannot afford to sell at lower prices, but it may look to reduce labour costs. The firm relies on contract workers who get released in September to October after the delivery of Christmas orders.
“If orders are weak this year, I will set my workers free earlier.”
Huang Qinqin, sales director at Zhong Shan Shi Limaton Electronics, a producer of exhaust fans, has similar thoughts on cutting costs after orders halved in the first quarter.
“In our factory, workers come to work when there are orders,” Huang said. This used to mean working overtime even on weekends, but it is more common this year for workers to take weekends off, she said.
For all the latest business News Click Here
