[Multi-picture] Research report: Chinese suppliers are cautiously optimistic about export growth

Chinese suppliers are cautiously optimistic about export earnings in the second half of 2012, given the uncertain economic situation in traditional export markets and rising production costs. The first factor has also led to more and more manufacturers turning to emerging markets for business expansion opportunities.

In a survey conducted by Global Sources, nearly 60% of 506 respondents indicated that export earnings in the second half of 2012 will be better than last year the same period. Fifteen percent of suppliers are more conservative, estimating that overseas sales figures for the second half of 2012 will be the same as the same period last year. By industry, suppliers in the consumer electronics, computer, security, telecommunications and electronic components industries are more optimistic than their counterparts in low-margin segments such as gifts and premiums. Smart, eco-friendly and enhanced electronic devices will become the mainstream of export products.

Export Revenue Forecast

The survey results show that the biggest challenge facing Chinese suppliers is the slowdown in orders from Europe and the United States, followed by rising production costs and price competition.

While economic indicators such as the Purchasing Managers Index (PMI) point to a slowdown in exports, the optimistic estimates in this survey also suggest that some companies are likely to be ready for this export reshuffle. Expect to benefit from it.

The biggest challenge

In general, the business strategy for the second half of the year is divided into two directions: focus on market expansion and customer retention.

55% of suppliers will seek new customers in markets other than the EU and US - China's traditional export markets.

Among emerging markets, South American countries performed better. In addition to taking into account the general growth of business due to economic expansion in South America, Brazil will be preparing to host two major sports events in the next few years, and many Chinese suppliers are also expecting a substantial increase in orders from Brazil. Shipments to the country will see a surge in the two to three months leading up to the 2014 World Cup, and again in the run-up to the 2016 Summer Olympics. Similarly, in the run-up to the 2012 British Olympics, while Chinese exports to the rest of the European Union fell, exports to the UK rose sharply.

Main Market

Many respondents will adopt more flexible pricing to avoid customer churn and struggle to support weak exports to the EU and the US. Companies will boost production efficiency to control manufacturing costs, thereby maximizing price increases (if they are unavoidable). Tighter spending controls will allow producers to protect profit margins that have been squeezed over the past few months.

Despite the drop in orders, the EU and the US will remain China's main export markets. Respondents noted that sales channels and customer bases in these mature markets have historically been more stable than in emerging markets.

Between the two, more suppliers focus on the US market. Producers that continue to focus on the EU market have more optimistic growth expectations. 18% of such suppliers expect export earnings to rise by 21% to 30% in the second half of the year. In addition, 7% predicted an increase of more than 50%. In contrast, only 3 percent of companies targeting the U.S. market expect exports to rise by that level.

Support business

The main objects involved in this survey are China's export bases: Guangdong, Zhejiang, Jiangsu and Fujian.

Suppliers (by location)

506 respondents came from a variety of industries, including home products, electronics, hardware and DIY supplies, gifts and premiums, apparel and textiles, and electronic components.

Export industry

More than 50% of respondents are medium-sized companies. Most of these companies export between $1 million and $5 million annually. More than a third of respondents are small businesses with export sales of less than $1 million. The object of this survey by Global Sources also includes some first-class enterprises.

Export revenue

Other analysis charts:

Business changes

margin

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Note: The Global Sources China Supplier Survey selects a large number of exporters from mainland China for interviews by email. The respondents come from all walks of life, with different company sizes and product expertise. The time period for conducting the research was the first 2 weeks ending August 14, 2012.

Pie charts are used to represent multiple-choice questions, and bar charts are used to represent multiple-choice questions. Results are calculated based on the actual number of valid responses to each question.

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If you have any questions about this research report, or wish to obtain more information, please contact the editor at: chnserv@https://www.globalsources .com/.