Survey Shows More Mainland China Manufacturers Expect to Raise Export Prices

Seventy-six percent of mainland China manufacturers expect to increase export prices in 2007 according to Global Sources' (Nasdaq: GSOL) Fourth Bi-Annual China Supplier Survey. This compares with 70 percent in Global Sources' previous survey for the first half of 2006.

For this survey, Global Sources conducted in-person and phone interviews with 509 mainland China exporters.

"Price competition is the top concern among mainland China's exporters," said Global Sources' general manager of Content Development, Michael Kleist.

"Another major challenge is the cost of key raw materials. The greatest increase was seen in brass, which last year tripled from its May 2005 level."
   
Among the surveyed suppliers' biggest challenges ahead:
    -- 35 percent cited price competition;
    -- 34 percent indicated higher material costs;
    -- 16 percent said design copying/piracy;
    -- 11 percent cited labor shortages; and
    -- 5 percent said stricter overseas standards.

Kleist added: "Despite higher costs and lower margins, most manufacturers are planning to limit prices increases to less than 10 percent to compete for buyer orders."

"Most manufacturers have indicated that the appreciation of the yuan is not a major concern. It only has a small impact on the cost of finished goods and can easily be overcome by strengthening competitive advantages in other areas."

The China Supplier Survey's data was compiled from 10 of Global Sources' China Sourcing Reports.

Source: CSCC