Chinese language producers are racing to search out patrons at residence and overseas as commerce tensions with the US threaten their single largest export market.
Chinese language commerce knowledge launched since US President Donald Trump introduced excessive tariffs in April exhibits elevated exports to different markets partially offsetting a plunge in US-bound shipments.
The worth of exports to Europe in Might climbed 12 per cent from a 12 months earlier, with shipments to Germany up 22 per cent. Exports to south-east Asian international locations rose 15 per cent.
Analysts stated China’s producers would be capable of make up in different markets at the very least among the gross sales misplaced due to US tariffs, serving to to make sure exports stay a pillar of a nationwide financial system nonetheless scuffling with a property sector downturn and weak shopper confidence.
“Consumption is weak and there’s less driving the economy on that front,” stated Leah Fahy, China economist at Capital Economics. “China’s still going to have to export all this stuff, so it’s going to have to go to other countries and they’re going to face a surge in Chinese imports.”
Producers’ efforts are on show in Zhejiang, China’s second-biggest exporting province, the place many manufacturing unit house owners are urgently shifting focus in the direction of buying and selling companions that look extra steady than the US, or to the massive however fiercely contested home market.
“We want to find new customers in markets like Europe,” stated Xia Shukun, a supervisor at Shaoxing Sulong Out of doors Know-how, which till now has solely exported to Asia and the US.
Xia stated a Norwegian purchaser had lately toured their manufacturing unit, the place the screech of blades slicing steel for camp stoves reverberates throughout three flooring, elevating hopes the corporate would possibly win its first buyer in Europe. “We’re very eager — we can make anything,” Xia stated.
With common US tariff charges on Chinese language items nonetheless above 50 per cent, and the chance Trump will reimpose sky-high charges that might make most commerce unviable, manufacturing unit house owners and managers up and down the Zhejiang coast stated they have been on the lookout for new markets.
Chen Zebin, whose household runs nail lamp producer Shaoxing Shangyu Lihua Digital Know-how, stated the proportion of its output going to the US had fallen to about 30 per cent this 12 months from 60 per cent in 2024, prompting it to shift to extra home gross sales, the place margins are thinner.
Chen stated orders from the US have been gradual regardless of a commerce battle truce between Washington and Beijing. “That road isn’t working so we need to find a new one,” he stated, including the corporate was exploring on-line gross sales channels, resembling Temu, and looking for clients in new markets, together with the Center East and Europe.
Doris Xia, a supervisor at Zhejiang-based Kimo stated the ability instrument producer was prioritising growth in Europe, Russia and south-east Asia after getting a cool reception at a commerce present in Las Vegas occasion in March, when Trump had solely imposed an additional 20 per cent tariff.
“Basically no customers came over to us,” Xia stated.
After the US, the highest vacation spot of Chinese language exports by worth final 12 months was the EU, adopted by Vietnam — the place many items are processed for re-export — Japan and South Korea.
The European Fee is attempting to trace and counter any surges of Chinese language imports. Its first surveillance report discovered sudden will increase in imports of merchandise starting from guitars to industrial robots, with China indicated as the largest supply of the surges.
“We are seeing a new ‘China shock’,” stated fee president Ursula von der Leyen on the G7 gathering in Canada this month. “As China’s economy slows down, Beijing floods global markets with subsidised overcapacity that its own market cannot absorb.”
Pencil Chu, who works with firms exporting by Chinese language ecommerce big Alibaba, stated factories that relied on the US for a comparatively small portion of their enterprise have been merely “cutting it off”.
“They want stability and in the long term it doesn’t look good,” Chu stated. “Many factories are concentrating on Europe.”
Seashore umbrella maker Ewing Tourism Merchandise, which bought most of its merchandise to shops resembling Lidl and Ikea in Europe even earlier than Trump’s tariff blitz, is beginning to be hit by a flood of merchandise supplied by beforehand US-focused Chinese language rivals.
“European buyers have too many factories to choose from, it’s driving prices down,” stated Vera Wu, the corporate’s 45-year-old founder. “This is the toughest year yet.”
With Zhejiang’s annual exports price about $550bn, second solely to southern Guangdong, leaders of the province are eager to assist its 100,000 producers climate the tariff turmoil.
The provincial authorities has begun protecting the price of attending commerce festivals overseas, rolling out language programmes to domesticate 100,000 new cross-border ecommerce sellers and rising subsidies for export credit score insurance coverage.
The Zhejiang metropolis of Cixi, billed as China’s “home of bearings”, affords some consolation to factories now making an attempt to pivot from the US.
Cixi locals say some bearings crops closed after Trump hit them with a 25 per cent tariff in his first time period. Chinese language customs knowledge exhibits bearings exports to the US have fallen 25 per cent since 2017.
However metropolis streets are nonetheless lined with bearing factories. Wang, a supervisor at a 40-worker bearing manufacturing unit supervisor who requested to be recognized solely by his surname, stated that again in 2018 he was intently following the commerce information out of Beijing and Washington.
Now, with bins stuffed with bearings destined for Indonesia and the Philippines stacked by his manufacturing unit door, Wang is way much less involved.
“The signal was clear, US-China relations were chaotic . . . We found new buyers in south east Asia,” he stated. “This time, I’m not paying attention.”
