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Survey Shows More Mainland China Manufacturers Expect to Raise Export Prices in 2007, Express Stronger Outlook for Higher Export Growth

2007-03-27 15:44 2868

HONG KONG, March 27 /Xinhua-PRNewswire/ -- Seventy-six percent of mainland China manufacturers expect to increase export prices in 2007 according to Global Sources’ (Nasdaq: GSOL) Fourth Bi-Annual China Supplier Survey. This compares with 70 percent in Global Sources’ previous survey for the first half of 2006.

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For this survey, Global Sources conducted in-person and phone interviews with 509 mainland China exporters.

The China Supplier Survey aims to give buyers who source from the region a look at pricing, capacity and production trends in the next 12 months. The Survey is free to download at http://www.globalsources.com/SITE/CSSURVEY.HTM .

"Price competition is the top concern among mainland China’s exporters," said Global Sources’ general manager of Content Development, Michael Kleist.

"Another major challenge is the cost of key raw materials. The greatest increase was seen in brass, which last year tripled from its May 2005 level."

Among the surveyed suppliers’ biggest challenges ahead:

-- 35 percent cited price competition;

-- 34 percent indicated higher material costs;

-- 16 percent said design copying/piracy;

-- 11 percent cited labor shortages; and

-- 5 percent said stricter overseas standards.

Kleist added: "Despite higher costs and lower margins, most manufacturers are planning to limit prices increases to less than 10 percent to compete for buyer orders."

"Most manufacturers have indicated that the appreciation of the yuan is not a major concern. It only has a small impact on the cost of finished goods and can easily be overcome by strengthening competitive advantages in other areas."

Positive outlook: 78 Percent Expect Large Sales Increases vs. 68 Percent in Last Survey

Kleist said: "Suppliers are more positive about export growth than in the first-half 2006 survey.

"In this survey, 78 percent said they expect sales will increase by 5 percent or more in the coming 12 months. In the previous survey, only 68 percent projected this level of growth.

"Additionally, more than 41 percent of respondents plan to increase production capacity by more than 20 percent. That compares with just 32 percent planning such increases in the previous survey.

"With sales targets and capacity plans up significantly from the last survey, it would appear Chinese suppliers feel they can maintain solid growth despite higher prices," said Kleist.

Nearly Half of Manufacturers Targeting Exports to the EU

Kleist said: "Because shipments to the EU generate the highest margins, nearly half of manufacturers are focusing on exports to the region.

"Even the higher cost of complying with the EU Restrictions on Hazardous Substances (RoHS) hasn’t deterred suppliers. In fact, many medium and large exporters welcome the restriction as an opportunity to grow exports, as competitors unable to meet the requirements drop out."

Among suppliers’ export targets for the next 12 months:

-- 49 percent plan to target the EU;

-- 25 percent plan to focus on the US;

-- 10 percent plan to target Asia; and

-- 7 percent plan to focus on the Middle East/Africa

The remaining 9 percent expect to focus on European (non-EU) and other countries.

Manufacturers surveyed produce air conditioners, automotive lights, ceiling light fixtures, eyewear, leather garments, massagers, pet products and solar panels.

Specialized Global Sources trade magazines, websites and China Sourcing Fairs

The China Supplier Survey’s data was compiled from 10 of Global Sources’ China Sourcing Reports ( http://www.chinasourcingreports.com ), part of the company’s product and sourcing information services which include Global Sources trade magazines, Global Sources Online ( http://www.globalsources.com ), Global Sources Direct ( http://www.globalsourcesdirect.com ) and the China Sourcing Fairs ( http://www.chinasourcingfair.com ). For more information about Global Sources, visit http://www.corporate.globalsources.com .

About Global Sources

Global Sources is a leading business-to-business (B2B) media company and a primary facilitator of two-way trade with Greater China. The core business is facilitating trade from Greater China to the world, using a wide range of English-language media. The other key business segment facilitates trade from the world to Greater China using Chinese-language media.

The company provides sourcing information to volume buyers and integrated marketing services to suppliers. It helps a community of over 560,000 active buyers source more profitably from complex overseas supply markets. With the goal of providing the most effective ways possible to advertise, market and sell, Global Sources enables suppliers to sell to hard-to-reach buyers in 230 countries.

The company offers the most extensive range of media and export marketing services in the industries it serves. It delivers information on 1.8 million products and more than 150,000 suppliers annually through 13 online marketplaces, 11 monthly magazines, over 100 sourcing research reports and nine specialized trade shows which run 22 times a year across seven cities.

Suppliers receive more than 10 million sales leads annually from buyers through Global Sources Online ( http://www.globalsources.com ) alone.

Global Sources has been facilitating global trade for 36 years. In mainland China it has over 1,600 team members in 44 locations, and a community of over 1 million registered online users and magazine readers for Chinese-language media.

Source: Global Sources
Keywords: Food/Beverages
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