Anyone surprised by this new report? According to the New York Times, the recession has made companies more conservative on price. So now, these companies are looking to Chinese suppliers, who have reduced prices, making it possible to grab the majority of the market share. Companies around the world are switching to China to cut costs and save money, making it easier for Chinese suppliers to gain leads in old markets and obtain new ones. China has surpassed Germany on exports this year and has become America's number one importer (formerly Canada).
How can China make such a leap into the global trade leader? According the New York Times, Chinese manufacturers cut wages, reduce production costs and hire migrant workers.
“China has a huge advantage,” says Nicholas R. Lardy, an economist at the Peterson Institute for International Economics in Washington. “They can adjust to market changes very rapidly. They have flexibility in their labor markets. And as consumers trade down the quality ladder, China can benefit.”
Recently, the European Commission is requesting an investigation into antidumping from Chinese exports and the International Montary Fund wants China to re-balance its economy by raising the value of its currency to match those of the Euro or the U.S. dollar.
Will China continue to hold the number one position in export?
“China is going to get stronger,” Mr. Tao at Credit Suisse says. “Its competitors are getting weaker in the downturn. And the Chinese state has helped bail out some industries, like the auto industry; so in the future some new industries may emerge as exporters.”
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