Auto Service World
News   September 11, 2006   by Auto Service World

China to Increase Export Prices

Global Sources’ Third Bi-Annual China Supplier Survey shows that 70 percent of mainland China manufacturers plan to raise export prices in the next 12 months, up from 63 percent at the end of the second half of 2005.
The China Supplier Survey compiles data from a range of consumer products exporters to give buyers who source from the region 12-month projections on pricing, capacity and production trends.
For this survey, data was gathered from suppliers of brake parts; cook tops, hoods & ovens; cosmetics; doors; faucets; gambling supplies; hardware fasteners; health monitors; sports balls, and swimwear.
Staff researchers interviewed 741 mainland China manufacturers in person and by phone over a six-month period.
General Manager of Global Sources’ Content Development, Michael Kleist, said: “Higher metal and plastic prices, higher domestic labour costs and a potential revaluation of the yuan have resulted in many mainland China manufacturers predicting higher prices in months ahead.
“However, due to fierce competition, 52 percent of respondents expect to limit price increases to 10 percent or less.”
Exports to the Middle East, Africa, non-EU European countries are expected to grow,
Kleist said: “North America and the European Union (EU) are key export markets for 61 percent of surveyed suppliers.
“To avoid cutthroat competition in those markets, many suppliers are focusing on other regions. Twenty-nine percent say they are targeting Africa, the Middle East and non-EU European countries like Russia. That’s up from 11 percent reported in the first half of 2005.”
In exports from China will continue their upward trend, but at a slightly less torrent pace.
Kleist said: “Suppliers are still positive about export growth, with 100 percent expecting some increase. However, as competition intensifies and costs rise, fewer suppliers are predicting large export growth increases.
“This year 68 percent of surveyed manufacturers expect export sales to increase by more than 5 percent, as compared with 80 percent for the second half of 2005. Also, more suppliers predict growth of 5 percent or less — 32 percent versus 19 percent in the last survey.”
Plans for capacity expansion have been scaled back, with 32 percent of suppliers projecting increases of more than 20 percent.
The second half 2005 survey showed 43 percent expected to increase capacity by more than 20 percent.
“Based on the surveys, suppliers can expect lower margins and buyers can expect higher prices in the months ahead,” Kleist said.

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