Europe remains tough export market

A rising dragon needs to ride on some clouds — as the Chinese used to say. And if you compare this to China's trade boom in the early 2000s, its exports to Europe were a very large cloud.

Not any more. Chinese figures show that, as a result of the lingering sovereign debt crisis, trade with the eurozone has seen negative growth since a year ago.

Chinese merchants are deeply worried. They are worried not just about their own losses but also about the slow progress in the local economies, as a result of the trade setback, and about the small chances for a quick recovery in the market.

Among them is Lin Xiumei, a businesswoman in her 30s, the owner of a two-story supermarket in Zengcheng, a factory town two hours' ride from Guangzhou, Guangdong prvovince.

"There are so few people coming to buy things that we've already had cash flow problems," she said, noting that this was a result of increasing numbers of employers cutting their payrolls or closing factories.

Guangdong Apple Co Ltd, which is in the neighborhood of Liu's supermarket, is a case in point.

During the first half of this year, the privately owned leather products maker and exporter, which used to depend on Europe for 70 percent of its business, saw its orders from Europe decline by 20 percent year-on-year.

What a contrast, for Zeng Hongwu, Guangdong Apple's deputy general manager, from the days prior to 2008, when annual export growth was generally between 20 and 30 percent.

"Now everything you hear is disappointing — falling orders, rising costs, an appreciating yuan, and a deteriorating market."

The same pressure is being felt across the globe, by Chinese merchants operating in Europe.

Su Xinying, deputy general manager of Arpadis Polyurethanes NV, a Belgium-based trading company, said her company imports chemicals from the Asia-Pacific region for resale in Europe, and all of its deals are settled in US dollars.

"The euro is declining and has been fluctuating against the dollar in recent months, and we don't have a positive outlook for the rest of this year," said Su.

"For importers, the trend has dented our profit margin and created uncertainty."