Business / Economy

Higher-value exporters survive turmoil in market

By He Wei and Qiu Quanlin in Guangzhou (China Daily) Updated: 2014-04-16 07:06

Overseas buyers look at the electrical appliance products on display at the Canton Fair that opened on Tuesday in Guangzhou. ZOU ZHONGPIN/CHINA DAILY

Weak demand and fluctuations in exchange rate hurt manufacturers

Higher-value Chinese exporters are more immune than low-cost manufacturers in the face of market turmoil from such things as weak demand, exchange-rate fluctuations and rising costs, said exhibitors at the Canton Fair that opened on Tuesday.

Shenzhen-based Yekalon Industry Inc, an exporter of home decoration goods to more than 200 clients, saw sales rise 20 percent in the first quarter, Vice-President Wang Lili said. That goes against China's national trade figures last week that showed imports and exports declining.

Fair shadowed by weak exports

China's foreign trade down 1% in Q1

Wang attributed his company's growth to a "separation, gap and warp resistant technology" applied on wooden floors, which finally bore fruit after three years of research and development.

"Each year a wave of European buyers would rush to our plants after they saw exhibits at the fair. Since only three companies globally can master such techniques, we have a bigger say in pricing despite the continued strengthening of the yuan," Wang said.

More Chinese firms are targeting businesses with expertise in specialized components and high-tech materials, fields in which US and European companies are normally strong.

The "OLED four-color display concept" is set to take foreign sales of Chinese panel TV maker Skyworth to new heights, Sales Director Zhou Qi said.

"The OLED technology, which allows a wider angle of view with a thinner display, is the best manifestation of our R& D capabilities and helps us retain stable customer flow," he said.

He was confident the firm's overseas revenue will rise to 5 billion yuan ($810 million) in 2014 from some 3 billion yuan a year ago. Surging costs will be mostly offset by the launch of new products, which usually boast a 10 percent or more profit margin than traditional TV sets, Zhou said.

Some small-cap firms, mostly low value-added manufacturers haven't weathered the storm.