While some believe the global recession is coming to an end, Chinese exporters of Christmas products report a sizable drop of orders from Western Europe and North America. But it may not be a bad thing, depending on where you stand.

Huida Christmas Decoration Products Factory in Shenzhen, Guangdong province, told China Central Television (CCTV) that the total value of this year's orders is 40 percent less than 2008. Owner Lin Zhanpeng said the family business started in 1969 in Hong Kong and moved to Shenzhen in 1982. It's the worse situation in many years, he said.

Meantime, Hatfield, UK-based International Greetings plc's Shenzhen factory is busy with Christmas production. General Manager Xu Zhaoren told CCTV, thanks to sales efforts of the company's European headquarters, orders have maintained last year's level. However, average prices are down 20 percent, squeezing the profit to near zero.

A trade group official in Shenzhen estimated that a third of the factories have shut down. Compared to manufacturers, the hundreds of small and midsize trading companies in Shenzhen are having an even more difficult time.

In addition to the major impact of the recession on Western consumers' purchasing preferences, and the fact that China still has a relatively small share of the premium market (which is supposed to be more immune to a recession), analysts point out more internal factors. First, China's export tax rebate for Christmas items was cut from 17 percent to 11 percent on July 1, 2007. Second, the healthy domestic market has convinced many Chinese manufacturers to turn away from export.

I'm wondering though, as the economy turns around, if the 2009 Christmas market might turn out better than expected. Some last-minute orders may become necessary, and production is likely to stay in or come back to North America for the geographical proximity to consumers. This could be good news for U.S. manufacturers, right?