An interesting article in the South China Morning Post outlines how Chinese companies producing everything from canned mandarin oranges, to mid and high-tier furniture, cannot sustain a business model without access to the U.S. market.
Right now those Chinese companies are praying the CCP central government keeps devaluing their currency, because U.S. purchasers, including wholesalers and intermediaries, have told those manufacturers they will not pay the import duties.
"The US client called us last weekend and asked us to pay the additional tariff of 5 per cent. We could not refuse since it was our idea to bid to supply the canned fruit for the supermarkets," she said.
If the yuan does not further depreciate by more than 5 per cent, she added, the company will have no choice but to cease exports to the US after October 1.
Been left blindsided after the US said on Friday that it would raise the tariff rate on US$250 billion of Chinese imports from 25 per cent to 30 per cent from October 1, and raise the planned new tariff rate on US$300 billion of goods from 10 per cent to 15 per cent in two tranches on September 1 and December 15.
China also reinstated the 25 per cent penalty duty on imports of US-made cars and car parts, bringing the total tariff on the sector to 40 per cent.
"In the case of medium-and high-end furniture, even with the addition of tariffs, it is still impossible to find substitute markets for our products," said Xie Jun, a furniture exporter in Haining, a city in Zhejiang province where hundreds of furniture factories make goods for export to the US. [] "For Chinese exporters, it is useless to be afraid because there is nowhere to hide. We can only rely on the wisdom and countermeasures of the central government," he said, adding that as long as Beijing can maintain employment levels and prevent the housing market from collapsing, "We are not afraid".
https://theconservativetreehouse.com/2019/08/27/the-leverage-of-dependency-chinese-manufacturers-admit-without-u-s-market-they-collapse/
Right now those Chinese companies are praying the CCP central government keeps devaluing their currency, because U.S. purchasers, including wholesalers and intermediaries, have told those manufacturers they will not pay the import duties.
"The US client called us last weekend and asked us to pay the additional tariff of 5 per cent. We could not refuse since it was our idea to bid to supply the canned fruit for the supermarkets," she said.
If the yuan does not further depreciate by more than 5 per cent, she added, the company will have no choice but to cease exports to the US after October 1.
Been left blindsided after the US said on Friday that it would raise the tariff rate on US$250 billion of Chinese imports from 25 per cent to 30 per cent from October 1, and raise the planned new tariff rate on US$300 billion of goods from 10 per cent to 15 per cent in two tranches on September 1 and December 15.
China also reinstated the 25 per cent penalty duty on imports of US-made cars and car parts, bringing the total tariff on the sector to 40 per cent.
"In the case of medium-and high-end furniture, even with the addition of tariffs, it is still impossible to find substitute markets for our products," said Xie Jun, a furniture exporter in Haining, a city in Zhejiang province where hundreds of furniture factories make goods for export to the US. [] "For Chinese exporters, it is useless to be afraid because there is nowhere to hide. We can only rely on the wisdom and countermeasures of the central government," he said, adding that as long as Beijing can maintain employment levels and prevent the housing market from collapsing, "We are not afraid".
https://theconservativetreehouse.com/2019/08/27/the-leverage-of-dependency-chinese-manufacturers-admit-without-u-s-market-they-collapse/
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