Source: Global Times
Singapore's Straits Times Article, Nov. 1, Title: The Troubles of China's "Christmas Commodity City" Mean Holiday Commodities Will Rise This Year, China's Yiwu — the world's largest manufacturing center for plastic reindeer, Twinkling Christmas tree lights and other Christmas supplies — is feeling the pressure from Christmas. Not only are local factories affected by shortages of raw materials that lead to rising production costs, but once goods are shipped, problems delay their journey to western store shelves. Since the middle of last month, Yiwu has also been affected by the continued strain on China's power supply.
"I'm under a lot of pressure and can't sleep at night," Lou Ting, the owner of the Christmas jewelry factory, said in her store in Yiwu's largest wholesale market, "It is reasonable to say that we are getting more orders than last year, but too much uncertainty is delaying the delivery process, and we are helpless." Like many of her peers in Yiwu, Ms. Lou is battling various production delays and record freight rates while working to send Christmas ornaments to the United States and Europe.
China exports $6.1 billion worth of Christmas products each year, about 80 percent of which comes from Yiwu. About 45% of the goods produced in Yiwu are exported to the US market.
Cai Qinliang, secretary general of the Yiwu Christmas Supplies Industry Association, said that in fact, most of the goods have been sent from Yiwu when the power supply shortage this year began to exacerbate the dilemma of manufacturers. But Chen Jiang, a factory owner who makes Christmas lights and Trees, said delays on the sea and at ports, as well as soaring prices of raw materials such as metal and plastic, meant consumers had to pay more for the shiny cheap jewelry this year.
Ding Shuang, an economist at Standard Chartered Bank, said: "Exporters and international brands may temporarily bear the rising costs, but merchants will not do loss-making business. If more companies exit the market, the supply will decrease and prices will rise further, as the remaining producers will have more pricing power. (Translated by Wang Huicong)