Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • CEO Issue
    • Diversity
    • Best Places to Work
      • 2022 winners
    • Processor of the Year
    • Rising Stars
    • Women Breaking the Mold
      • 2022 class
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Resin Prices
    • All Resins
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
April 12, 2010 02:00 AM

Problems persist for China's exporters

  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    China's quick economic rebound, albeit exciting, is putting more pressure on export-focused manufacturers.

    Some lingering issues — such as the labor shortage, unpredictable pricing and lead times, and currency instability — are receiving renewed attention. There are no simple fixes for these problems, exhibitors from mainland China said at the recent International Home + Housewares Show in Chicago.

    While they expressed different views on some of the hot issues, most of those exhibitors remain optimistic that China's role as a major exporter will continue in the future.

    Appreciation of yuan

    “I won't be surprised if the yuan rises 1 or 2 percent against the dollar by the end of the year,” said Helen Yang, vice president of sales at Guanghaida Rubber & Plastic Co. Ltd. of Dongguan in Guangdong Province.

    It wouldn't be a “big deal,” she said, considering that the Chinese currency has strengthened more than 20 percent in the past five years.

    China revalued the yuan by 2.1 percent against the dollar in July 2005, let it climb another 19 percent until the global financial crisis hit in mid-2008, and has since kept it stable.

    Yang said she is not worried, because “everybody else has this problem too.” It is up to the government whether to protect exporters, she said at the March 14-16 show.

    An increasingly stronger yuan, combined with rising raw material and labor costs, is challenging Chinese exporters to constantly look for new ways to cut costs, Yang added.

    Another Guangdong-based exporter is hopeful that the export market will remain profitable despite the potential currency fluctuation.

    “As long as we can tap the potential of the market, the currency issue is not a major concern,” said Rachel Wu with Jiangmen Dajiabei Plastic & Hardware Manufacture Co. Ltd., a first-time exhibitor at the Chicago housewares show.

    The currency re-evaluation is not just impacting exports to the United States, Wu added, as transactions with European clients are also conducted in U.S. dollars.

    “We will not give up the market because of the exchange rate,” said Sonny Zheng, who works for plastic food container and housewares manufacturer Haixing Plastic & Rubber Co. Ltd. of Jieyang, also in Guangdong Province. “It is having an impact, but we are more focused on the recovery of the U.S. market.”

    Edward Zhang, president of El Monte, Calif.-based Dowin Enterprise Inc., believes the exchange rate will be stable until the end of the year. “I don't see it going up in April, although many people speculate so.”

    Zhang said the Chinese government has no other option but to support the export sector. Some of the Chinese exhibitors at the housewares show received a government allowance that covers up to 70 percent of their exhibiting cost, he added.

    Workforce shortages

    Just as Chinese factories started seeing growth and taking more export orders, a new wave of labor shortages hit the major manufacturing regions, especially after the Chinese New Year in mid- February. Local government agencies posted significant labor shortages and helped companies recruit workers from inland areas.

    “This year [the labor shortage] is definitely worse than before,” Guanghaida's Yang said. “It's because many former migrant workers chose to stay where they were from, instead of coming back to factories in the east coast.”

    Injection molder Haixing said its Jieyang factory had some difficulty filling positions after the Chinese New Year. The problem has since been solved, Zheng said. However, from a macro perspective, it will continue to be a problem.

    “The older migrant workers are retiring and their grown children are not willing to take over the factory jobs. They don't want to operate machines or work on the assembly line. But they also can't find the type of jobs they would like in the cities,” Zheng said.

    For Jason Jin, however, labor is solely an issue of compensation. Jin helps Wuxi-based Juhua Electric Appliances Group Corp. market small appliances in the U.S.

    “All it takes is a raise,” he said, “But that would inflate the cost, and the importers are not willing to pay at this point.”

    The competition

    The cost and lead-time issues associated with buying from China are opening up opportunities for other developing countries, such as India and Vietnam. But the Chinese are not ready to relinquish dominance.

    India and Vietnam may offer cheaper labor, but China has a more developed supply-chain network, Yang said. “I've heard about American buyers who switched [from China] to Vietnam, and not much later came back to China because they couldn't find as good packaging material and service there,” she said.

    It's hard for competition to catch up with China's large-scale manufacturing, according to Yang. “A big factory comes with more certainty than a smaller one. By the same token, the Chinese economy has less uncertainty than many of the smaller economies in Asia.”

    Global sourcing varies by the industry, Zhang noted. “[If you are sourcing] bamboo handicrafts, smaller orders, Vietnam is a good choice. But when it comes to plastic processing, China is the way to go.”

    Despite wage increases and labor shortages, Zhang said he would not move his factory from China to Vietnam for cheaper labor, because it would inflate other non-labor costs. “For example, it costs a lot more to repair an injection press in Vietnam than in China. … Also, a foreign country doesn't offer the support we get from all the established connections in China.”

    Eventually, Yang said her firm would like to move up the value chain and create its own brand instead of solely relying on U.S. agents. “I design my own products. We just need to catch up on marketing knowledge and skills — which Chinese companies lack — and also protect intellectual properties.”

    Copyright 2010 Crain Communications Inc. All Rights Reserved.

    RECOMMENDED FOR YOU
    APR: US recyclers have capacity to grow, but not enough feedstock
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    ‘Crazy' offers prompt sale of medical supplier Molded Devices
    2
    Auto supplier Gissing enters Chapter 11, owes Tesla $13.3M
    3
    California may curb plastics in online shipping
    4
    PepsiCo cuts bottle design costs, time with 3D printed mold inserts
    5
    Polymer Points Live - August 2022
    SIGN UP FOR TO RECEIVE THESE EMAILS AND ENEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Urethanes Technology
    • European Rubber Journal
    • Tire Business
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • CEO Issue
        • Diversity
        • Best Places to Work
          • 2022 winners
        • Processor of the Year
        • Rising Stars
        • Women Breaking the Mold
          • 2022 class
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Resin Prices
      • All Resins
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified