China Exports to Developing Nations Fell

Exports from China to developing nations, which helped the country address global financial crisis, fell as advanced economies’ demand fail to recover.

The country’s exports to emerging markets fell by six percent during the second quarter. In 2011, there was a 26 percent surge. While in 2012, a 33 percent increase was reported.

After a 22 percent slump in the first three months, exports to Middle East and other fuel-exporting countries went down by almost 12 percent.

China Exports to Developing Nations Fell

Source: Bloomberg

During the biennial Canton Fair in Guangzhou last week, exporters and foreign buyers were interviewed. According to them, Middle East undercut demand was driven by Syria war, weak commodities prices, and low oil values.

Dannol Electronics Co. Senior Sales Representative, Fan Miaochang, stated that 40 percent of its sales were accounted for Middle East orders. Since 2014, this declined and the company even cut 70 jobs.

Rogerlin Sales Manager, Yu Jingling, added that commodity price falls hit the company, which is a province-based bag maker delivering to Middle East, Venezuela, Russia, and Brazil.

Jingling added that even after up to 8 percent discounts, sales still fell by 40 percent. The company has to cut 200 staff and combine its two factories.

China Exports to Developing Nations Fell

Source: Bloomberg

Rikan General Trading LLC’s Riaz Khimani claimed that Russians spend a lot and no longer visit Middle East. Room rates of hotel have dropped, while the demand for China’s markets has reached its end. The company has been purchasing products in the country for almost 10 years.

The country’s manufacturers are facing an intricate challenge, as shown by imports slide in emerging markets. Nonetheless, hope remains when in September, producer prices had its first-time increase since 2012. In addition, a two-year high was achieved by the gauge of purchasing managers.

Commodity prices’ exchange offer some positivity that emerging markets are simply reaching its low point. Last month, International Monetary Fund even released its forecasted growth in emerging markets.

Capital Economics Singapore Economist, Julian Evans-Pritchard, claimed that things are quietly recovering for numerous commodity producers. Up to now, emerging markets will still provide the biggest pull next year. The worst case is also yet to end.

About the Author
The Stock Signals Philippines is the online news media arm of Equilyst Analytics. Inc., an SEC-registered stock market consultancy firm in the Philippines that guides Filipinos on long-term investing and short-term trading and offers mentoring services.

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