Research Shows China Exporters Cautiously Optimistic as They Shift Focus to Emerging Markets (FXI)
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Investors haven't had a tremendous amount of love for equities in China so far this year. In just the past month, iShares FTSE China 25 Index ETF (NYSE: FXI) has declined by 8 percent, and it is currently trading near yearly lows at 32. The decline is a result of investor fears about slowing and overall bearish sentiment about China and the government’s ability to orchestrate a so-called soft landing.
Despite this, suppliers in China are cautiously optimistic about their export revenue in the second half of 2012, according to a survey of 506 exporters by Global Sources (NASDAQ: GSOL). Nearly 60 percent of surveyed companies said export earnings are expected to be better compared to the same period in the previous year.
Survey results indicate softening orders from the US and the EU are the biggest challenges facing China suppliers, followed by rising production costs and price competition.
"Exporters are already taking proactive measures to sustain their export business in view of slowing business from the EU and the US," said Craig Pepples, Global Sources' President of Corporate Affairs.
Many exporters are shifting their focus away from the EU as orders from the region soften due to the economic challenges there. While 32 percent of surveyed suppliers said the EU is currently their main market, only 20 percent said it would be their target market in the coming months. As a result, they are turning to emerging markets. According to the survey, 55 percent intend to target emerging markets.
According to survey results, South America is expected to be an important export market for China suppliers in the coming months. While 8 percent of respondents are currently focused on the continent, 18 percent noted this would be their target market through the end of the year.
While this is an interesting shift, the EU and the US together are expected to remain the primary overseas destinations for China exporters.
Despite this, suppliers in China are cautiously optimistic about their export revenue in the second half of 2012, according to a survey of 506 exporters by Global Sources (NASDAQ: GSOL). Nearly 60 percent of surveyed companies said export earnings are expected to be better compared to the same period in the previous year.
Survey results indicate softening orders from the US and the EU are the biggest challenges facing China suppliers, followed by rising production costs and price competition.
"Exporters are already taking proactive measures to sustain their export business in view of slowing business from the EU and the US," said Craig Pepples, Global Sources' President of Corporate Affairs.
Many exporters are shifting their focus away from the EU as orders from the region soften due to the economic challenges there. While 32 percent of surveyed suppliers said the EU is currently their main market, only 20 percent said it would be their target market in the coming months. As a result, they are turning to emerging markets. According to the survey, 55 percent intend to target emerging markets.
According to survey results, South America is expected to be an important export market for China suppliers in the coming months. While 8 percent of respondents are currently focused on the continent, 18 percent noted this would be their target market through the end of the year.
While this is an interesting shift, the EU and the US together are expected to remain the primary overseas destinations for China exporters.
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