EU debt crisis affects Chinese export corporations

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Time:2010-05-24 20:40:12 Author：Rensino Packaging

The effects of Europe's debt crisis is beginning to permeate to Chinese exporters. A lot of manufacturers are already acknowledging a downslope in orders from Europe.

　At present experts are warning companies to get ready for a longer term shock. In Jiangsu province, China, the Higher Bus Company is major passenger vehicle exporter. Because of the drop in the euro, it's being forced to negotiate.

　　Ma Rentao, Overseas Sales GM, Higer Bus, said, "The decline in the euro affects our orders directly. Those who want to buy our products may postpone their orders."

　　Compared to large export corporation, small and medium companies are facing more pressure, such as the packaging industry. The changing currency exchange rate can dramatically bring down their profits.

　　Wen Bin Director, Int'l Financial Research, BOC, said, "The Euro has declined by over 16 percent against the US dollar. Companies export profits are usually about 5 percent. So that means they will lose more than 10 percent."

　　Analysts state that Europe's debt crisis could have an effect on Chinese companies by until the third quarter, especially in labor intensive industries like textiles, mechanical and electrical. Companies should prepare for further exchange rate risks.

Packaging industry is a labor intensive industry, the profits is so low. A plastic bag is only sold no more than 0.1 RMB. Other packaging products, such as food bag, spout pouch, PET film, are of low cost and even low profit.

Keywords： packaging bags, food bag, spout pouch, packaging film.

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EU debt crisis affects Chinese export corporations