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Slowing business in China's low-cost production mecca indicates the country's move to high-value products is gaining momentum.
The Yiwu Prosperity Index, which is based on data gathered from wholesalers in Yiwu city, Zhejiang province, dipped to its lowest level in May 2012 since it was first published in 2006.
Representative of China's low-value exports and domestic sales, the index has for the first time in its history fallen below the 1,000 point mark. And it has stayed at this level for four of the first five months this year.
The drop suggests that the country's strategic move from low-value production to high-value lines is picking up steam.
Various industry players have called for an increase in output of high-end products with greater growth and revenue opportunities to sustain exports. Among these are the sunrise segments of tablet PCs, and smartphones and TVs, and capital goods.
The downward trend of the Prosperity Index also indicates the EU's debt crisis continues to impact China's exports, offsetting recovering orders from the US.
The Export Price Index, meanwhile, has stayed in the 100 level for the past 15 months as suppliers strive to cope with rising material and production outlay, and the appreciating yuan. In January 2012, the index was at its highest level in the past six years.
The Yiwu Prosperity and Export Price Index are part of the Yiwu-China Small Commodity Index. These are jointly released by the Ministry of Commerce, Zhejiang Gongshang University Institute of Statistical Sciences, Modern Business and Trade Research Center, Hundsun Technologies Inc. and Zhejiang China Commodities City Group Co. Ltd.
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