Foreign trade recovery seen in delta

Exporters' confidence rises even as material and labor costs increase

The foreign trade climate index of small and medium-sized exporters in the Pearl River Delta surpassed the satisfaction threshold for the first time this year in April, indicating a recovery in trade, an industrial report says.

The index, which reflects exporters' confidence in shipping products overseas, was above the satisfaction threshold at 101.7 in April, according to the report, which was released May 19 by Shenzhen Onetouch Business Service Co, a subsidiary of Alibaba.com.

The company, which provides Chinese exporters with online services, including customs clearance, trade financing, foreign exchange and logistics, releases the trade report each month.

According to the report, new orders, real export cargo volume and the capacity utilization rate in the Delta region, one of the major manufacturing and trade bases in China, were on the upswing in April.

"The upstream export trend in April indicated that manufacturers in the Delta region gradually warded off impacts brought about by a slower demand from overseas buyers after the Spring Festival, which is usually a period for slow trade growth," says Xiao Feng, deputy general manager of Shenzhen Onetouch Business Service.

But 2,000 small and medium-sized exporters surveyed in the Delta region report an export value increase of only 0.87 percent year-on-year in April, indicating a weak recovery, according to the report.

According to the Guangdong customs authority, the trade value of Guangdong, which accounts for about one-fourth of the country's total trade, was down 18.7 percent year-on-year in April.

"The drop of export value was partly due to a lower price of Chinese products being shipped to major overseas countries and regions," Xiao says.

The export increase data in April was lower than that seen in March, which reported a 3.42 percent year-on-year increase.

In April, the price index of export commodities was below the threshold at 87.34, the report says.

Specifically, the price index for major commodities such as furniture, garments and telecommunication products were all below the satisfaction threshold, according to the report.

"The price of major Chinese products will continue a downward trend in the near future," Xiao says.

According to Xiao, the increased costs of materials and labor, and rising financing pressure have squeezed exporters' profits.

"Chinese exporters, especially small and medium-sized ones, should develop more value-added products to increase their ability to make profits." Simplified procedures and more professional trade services should help the exporters, he says.

In a move to encourage Chinese suppliers to use the company's online export services, Shenzhen Onetouch announced last week that it would pay manufacturers and suppliers up to 0.03 yuan for every $1 in value of export transactions handled through its service.

Zeng Zhaoyang, manager of the trade department for Guangdong Hopeful Electric Co, says overseas orders for electric fans began to pick up after the first quarter as the summer season approached.

"We received more orders in April. But it is hard to make big profits as prices are down, and the labor and production costs increased a lot," Zeng says.

qiuquanlin@chinadaily.com.cn

(China Daily Africa Weekly 05/23/2014 page23)