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China's export far from full recovery - analysts
(Xinhua)
Updated: 2009-09-13 20:05 A recent orders increase in many Chinese export-oriented companies combining a slower downward rate in the country's foreign trade figures added to signs that the dwindling export has scraped bottom amid the shrinking global economy, but analysts were not so optimistic about full recovery in the short term. They attributed orders increase to temporary seasonal factors, such as Christmas consumption, saying a full-fledged export revival would hinge on a real growth of the world's economy. Manufacturers attending the 13th China International Trade and Investment Fair that closed on September 10 in China's east coastal city Xiamen, Fujian Province, said they had undergone the worst time and were on track for a gradual recovery as overseas orders leaped in recent months. "Sales in the first half of this year had rebounded to the level a year earlier after the company took orders of 7 million pairs of slippers from Wal-Mart in May," Zheng Guozhang, general manager of Baofeng Foreign Trade Co Ltd, a Fujian-based slippers manufacturer with an annual output of 25 million pairs, said Sunday after returning from the trade fair. Zheng also believed his company would receive more overseas orders in the second half year as inventories declined in the first half and the foreign importers would increase stockpiles.
"The current order rise may be a combined result of a Christmas demand, and a rapid progress in unwinding excessive inventories in the overseas market," Li Wenpu, deputy head with the Economic School of Xiamen University, said Sunday. The looming Christmas has driven the demand for present-related products, bringing a revival to relative industries. However, a meaningful recovery in the country's export depends on a solid growth in the world's economy and would crop up in the first half next year, according to Li. NIGHTMARE HARDSHIPS Many Chinese manufacturers have been struggling at the profits bottom or even operating below the break-even point after last October's financial tsunami dragged the world's economy into a steep contraction. "As daily necessities, overseas demand for slippers is usually stable. But exports value in the second half of last year slumped by 20 percent due to a weak market demand," said Zheng. Lai Guanghui, manager of a Guangdong-based garment company, has been trying to stave off bankruptcy by lowering the minimum requirement for each order from 3,000 items to 1,000 items in March, because he believes "the company will make money sooner or later as long as the business keeps on going." The same nightmare also fell on Xiao Xinrong, general manager of a Fujian-based umbrella company, who complained profits have dropped more than 30 percent in the first half of this year from a year earlier. "We have sold at a loss in order to maintain business ties with our regular clients in East Asia," said Xiao. Data from the General Administration of Customs (GAOC) on September 11 showed, from January to August, the country's imports and exports totaled $1.34 trillion, down 22.4 percent compared with the same period last year. Export values in garment, textile and white ware sectors in the first eight months dropped 10.4 percent, 14.9 percent, and 20.6 percent, respectively. "Half of the machines were laid off in February and 40 percent of workers were dismissed," said Xiao. (For more biz stories, please visit Industries)
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