Manufacturers need strategies stressing quality
The export manufacturing sector in China experienced further setbacks in 2015 compared with the previous year, according to a white paper released on Wednesday by U.S.-based delivery company UPS.
Experts said that domestic export manufacturers should increase their competitiveness by measures other than lowering prices, such as focusing on segment markets and increasing product quality.
The white paper was based on 1,000 interviews UPS conducted in December 2015 with senior decision-makers from China's export manufacturers, according to UPS. It followed the company's research in mid-2014 with another 1,000 senior decision-makers in the export manufacturing sector in China.
According to the white paper, the overall condition of domestic export manufacturers deteriorated in 2015 compared with the previous year.
About 63 percent of the interviewees said their businesses picked up in 2015, while 74 percent reported improvement in their business in 2014.
About 68 percent of the interviewees said they saw increased competition in the export manufacturing sector in the past five years.
"China's exports have been on the rise since 2001. However, after the global economic crisis in 2008, domestic exports faced unprecedented challenges," Liu Shengjun, executive deputy director of the CEIBS Lujiazui Institute of International Finance, said at the UPS press conference on Wednesday. "And these are not periodic challenges, which means the situation won't improve automatically in the future."
China's exports decreased 7.4 percent year-on-year to $1.17 trillion from January to July, data from the General Administration of Customs showed on Monday.
However, export manufacturers in Beijing and Tianjin performed better in terms of order growth and -production increases than companies in other regions, the white paper showed.
"Beijing and Tianjin are two of the bases of China's traditional industrial enterprises," Liu told the Global Times on Wednesday.
"Because of the supply glut and air pollution, companies in the areas are under more pressure to carry out business transformation," said Liu.
Richard Loi, president of UPS China, said at the conference that whether domestic export manufacturers can withstand the hard times depends on if they are willing to change their management strategies, such as by providing products with better quality.
According to the white paper, -domestic export manufacturers paid less attention to building partnerships with clients to expand to new markets and helping customers innovate in 2015 than in the previous year.
Arthur Lam, marketing director of UPS China, nevertheless told the Global Times on Wednesday that some enterprises have realized the importance of those matters but they are not capable of putting them into action.
Lower prices may not be the best strategy for domestic export manufacturers to become more competitive, as price is becoming a less compelling factor for buyers when considering new suppliers.
