US Housing Crisis Hurts Chinese Manufactuers

Furniture World Magazine

An article in the International Herald Tribune reported on how the credit crunch in the US and housing turn has affected international manufacturers and especially those in China. The article reported on specific regions hurt by the downturn and the increase in bankruptcies. It also noted on the fact that Chinese manufacturers have been reluctant to pass on price increases, and that, "The gravity of the sector's ills are hard to judge from official figures. "Furniture exports in the first six months of 2008 were still up 28.5 percent in dollar terms from a year earlier, almost as strong as the 29.3 percent gain in all of 2007. "But a report to the cabinet by the Ministry of Commerce said the average profit margin of companies it surveys fell to only 1.1 percent in the first five months from 3.2 percent in the same period last year. "The ministry recommended slowing the yuan's pace of appreciation and increasing rebates of value added tax, or VAT, to exporters to prevent a sharp drop in overseas shipments. The full text of the article can be found at: (http://www.iht.com/articles/2008/07/27/business/furniture.php)