At China’s largest trade fair, exporters worry about world economy

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GUANGZHOU – Chinese exporters showcasing their wares at the country’s largest trade fair say the weakening global economy is hurting their businesses, with many investments frozen and some cut labor costs in response.

The bleak mood at the Canton Fair in the southern city of Guangzhou showed China’s surprise export increase in March could reflect exporters catching up on orders delayed last year due to the drought. COVID-19 containment rather than restored economic strength.

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The first major trade event since China abruptly lifted COVID restrictions and reopened its borders came as sharp increases in borrowing costs in the United States and Europe hit demand for goods. goods made in China.

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Kris Lin, a representative of Christmas lights maker Taizhou Hangjie Lamps, said orders this year were down 30% from last year.

“Last year’s difficulties came from logistics and production interruptions, but local authorities have helped to solve them. It’s an internal matter. Now we have external problems. We can’t deal with them,” Lin said.

“This year will be the hardest for us,” he said, with higher electricity costs due to the war in Ukraine reducing his need for decorations even further.

Lin said the company cannot sell at a lower price, but it can find ways to reduce labor costs. The company relies on contract workers who are set free in September through October after the delivery of Christmas orders.

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“If orders are weak this year, I will release workers sooner.”

Huang Qinqin, sales manager of Zhong Shan Shi Limaton Electronics, a manufacturer of ventilators, had similar thoughts about cutting costs after orders halved in the first quarter.

“In our factory, workers come to work when there is an order,” Huang said. This used to mean working overtime even on weekends, but this year it’s more common for workers to get weekends off, she said.

A manufacturer of shaving equipment from the eastern city of Ningbo, who requested anonymity to disclose future plans, said the company has laid off workers and will lower prices in the coming months if the order ordering is not improved.

A worse outlook for workers in the manufacturing industries will cause concern for policymakers, who aim to create 12 million new jobs across China this year, up from the target. spent 11 million last year.

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Dozens of Chinese suppliers told Reuters they did not intend to spend a lot of money on improving production lines this year due to weak demand.

“We have no plans to increase investment,” said Luna Hou, a sales representative for Topgrill, which makes outdoor grills and offered a 5% discount to attract buyers.

Vicky Chen, director of foreign trade for socket maker Qinjia Electric, said she did not expect a sharp increase in sales at the fair, which runs until May 5.

“The entire global economy is underperforming at the moment and fairness is not going to change that.” (Ellen Zhang David Kirton; Writing by Marius Zaharia; Editing by Tom Hogue)