Chinese vendors plan price hikes

12 May 2008
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13 May 2008 | Jake Kanter

Most Chinese suppliers plan to increase exports and the prices they charge over the next year, according to a study.

The survey by supplier information firm Global Sources questioned 711 China manufacturers in product categories such as stationery, solar panels and brake parts. It found over 90 per cent believed exports will grow as much as 20 per cent over the next 12 months, as suppliers target buyers in the EU.

But 80 per cent of vendors are also planning to increase prices - the highest number since the survey (which is conducted every six months) began in 2005. While 53 per cent plan to make cost increases of up to 5 per cent, 37 per cent planned rises of between 5 and 10 per cent. And the remaining 10 per cent said they would put prices up by at least 15 per cent.

More than 40 per cent of respondents said they could no longer absorb significant rises in materials costs including cotton, iron and steel.

There was evidence of vendors taking internal action to reduce operational costs - 38 per cent plan to improve management systems to streamline processes, while 19 per cent intend to reduce waste.

Spenser Au, president of Asian sales at Global Sources, said suppliers in China have been dealing with rising costs to stay competitive, but most now have no option but to enforce price rises.



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