UPDATE-MNI REALITY CHECK: Apr China Exports To Extend Declines

By Wanxia Lin

     BEIJING (MNI) - The decline in Chinese exports probably accelerated in

April, outpacing the 6.6% fall seen in March, as coronavirus lockdowns spread

around the globe, manufacturing industry leaders told MNI.

     Here are key points from their comments ahead of the May 7 data release:

     **April new orders received are seen at fraction of 2019 levels.

     **The cost of repositioning products for sale into the Chinese market may

not be affordable.

     **Medical supply exports surged as pandemic eased in China.

     SAMMI ZHENG, HEAD OF WATCH STRAP MANUFACTURER IN DONGGUAN CITY:

     "In April, we received very limited new orders -- making a few thousands

watch straps for Japanese clients -- which was only 5% of the total orders

received a year earlier."

     "Having a small amount of orders may not be a good news, because profits

may not even cover the cost of electricity and labor."

     "The market may not recover this year," said Zheng, who said she is

considering mothballing the factory output unless the pandemic eases.

     "It's very difficult for us to find a comparable buyer in China willing to

pay the same price to cover our high costs, as our machines and technical

processing are customized to meet our Japanese clients' high demands."

     CHERRY DENG, MARKETING DIRECTOR AT A FURNITURE MANUFACTURER IN DONGGUAN:

     "Exports to the Australian market saw little impact, but exports to the

Middle East kept being postponed," she said, adding that clients in that region

won't even take shipment of orders completed in March.

     "New orders would now normally be lined up until September, but in recent

months we were asked by clients to delay production with no exact delivery

date."

     "Many factories may not run their production line for May orders if they

can't deliver goods which have already piled up," she added. "Many companies

would have to send employees on compulsory leave if ports overseas remain closed

next month."

     XIANZHONG XIE, MANAGER AT GUANGZHOU DUNHONG IMP & EXP TRADING CO., LTD:

     "Requests by foreign trading companies to help them deal with export and

import documents declined sharply ... trade volume is shrinking."

     "We did receive a surge of requests in the consulting licences needed to

produce virus prevention equipment like masks."

     OWNER OF A U.S. CLOTHING COMPANY WITH MANUFACTURING OPERATIONS IN CHINA :

     "In March it was a disaster...Retailers having no traffic cancelled orders

because of high inventory. But it is getting better starting from late April,

with approximately 20% of orders cancelled comparing with April last year."

     "We kept our factory sites running very slowly, but some of our

subcontractors, especially small factories, ran into trouble as we didn't have

enough orders to feed them," he said, adding that more small businesses may go

bankrupt in the next couple of months.

     "The annual output of the apparel sector may decline at least 30% from a

year earlier," he said, adding he hoped the market would rebound in 2021 if

coronavirus treatments or vaccines become available.

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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