SHENZHEN: Wedding dress maker Wang Lujia earns a living making brides happy, but the global economic crisis is casting a chill over her small business in southern China.
At her workshop in the manufacturing hub of Shenzhen, workers stitch and bead by hand
wedding gowns designed for brides in the United States and Europe, which are now reeling from financial turmoil.
“The external crisis had a big impact this year. Business was not so good,” Wang, founder of Divine Bridal Co., told Agence France-Presse in her showroom filled with 600 wedding and party dresses.
Over the past three decades, Shenzhen has grown from a sleepy fishing village to the heartland of China’s export juggernaut. But as demand from China’s key markets slows, companies here are suffering.
As orders have tailed off, the cost of raw materials and labor have surged, with workers striking to demand higher pay. Meanwhile, China’s gradually appreciating yuan currency is making products more expensive on overseas markets, trimming profit margins. And the worst might be yet to come for Europe and the United States, key export markets for China.
Chinese officials have warned that the eurozone debt crisis and sluggish recovery in the United States threaten the world’s second-largest economy.
Export growth has fallen from 31 percent in 2010 to an annual rate of 21 percent in the January to November period of 2011, and is predicted to slow further next year. Struggling exporters are seeking ways to survive the economic crisis by exploring new overseas markets, turning to domestic consumers and finding new products.
One company, Shenzhen Rongen Technology, is moving away from the LED screens it makes to high-end medical devices. “The number of orders may be less, but the profit margins are higher,” salesman Lu Daqing said.
Dressmaker Wang is finding a new market for her bespoke wedding gowns, which can sell for up to $1,000, by turning to domestic consumers with cash to pay for luxuries like imported fabric and Japanese beads.
“Exports are not as good as the domestic market. The overseas market is weak,” she said.
Wang estimates the price of fabric has risen by as much as 40 percent in the past four years and says the rising cost of material and salaries for workers are pushing up her prices and discouraging overseas customers.
Shenzhen City, her base, has the highest minimum wage in China and the local government plans to hike the level by another 14 percent to 1,500 yuan ($240) per month in 2012.
At her workshop in the manufacturing hub of Shenzhen, workers stitch and bead by hand
wedding gowns designed for brides in the United States and Europe, which are now reeling from financial turmoil.
“The external crisis had a big impact this year. Business was not so good,” Wang, founder of Divine Bridal Co., told Agence France-Presse in her showroom filled with 600 wedding and party dresses.
Over the past three decades, Shenzhen has grown from a sleepy fishing village to the heartland of China’s export juggernaut. But as demand from China’s key markets slows, companies here are suffering.
As orders have tailed off, the cost of raw materials and labor have surged, with workers striking to demand higher pay. Meanwhile, China’s gradually appreciating yuan currency is making products more expensive on overseas markets, trimming profit margins. And the worst might be yet to come for Europe and the United States, key export markets for China.
Chinese officials have warned that the eurozone debt crisis and sluggish recovery in the United States threaten the world’s second-largest economy.
Export growth has fallen from 31 percent in 2010 to an annual rate of 21 percent in the January to November period of 2011, and is predicted to slow further next year. Struggling exporters are seeking ways to survive the economic crisis by exploring new overseas markets, turning to domestic consumers and finding new products.
One company, Shenzhen Rongen Technology, is moving away from the LED screens it makes to high-end medical devices. “The number of orders may be less, but the profit margins are higher,” salesman Lu Daqing said.
Dressmaker Wang is finding a new market for her bespoke wedding gowns, which can sell for up to $1,000, by turning to domestic consumers with cash to pay for luxuries like imported fabric and Japanese beads.
“Exports are not as good as the domestic market. The overseas market is weak,” she said.
Wang estimates the price of fabric has risen by as much as 40 percent in the past four years and says the rising cost of material and salaries for workers are pushing up her prices and discouraging overseas customers.
Shenzhen City, her base, has the highest minimum wage in China and the local government plans to hike the level by another 14 percent to 1,500 yuan ($240) per month in 2012.
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