1. China’s economy & its import and export trade
According to the latest “China Economy Quarterly” released on Dec.14, 2006 by the World Bank, China’s economic growth rate for the year 2006 is expected to reach 10.4% while its growth rate for the year 2007 is expected to slow down to 9.6%. China is now facing the challenge of balancing its economic development with the distribution of its benefits.
Relevant statistics show that China’s foreign exchange reserves exceed US$1,000 billion, and the country is now the world’s largest holder of foreign exchange. Since its entry into the WTO, China’s total import & export volume has increased to US$1,422.1 billion in 2005 from US$473.5 billion in 2000. In the same period, export value tripled from US$249.2 billion to US$762 billion. According to China Customs’ statistics, foreign trade for 2006 met a new record high at US$ 1,761 billion, up 23.8 % on 2005. The value of exports reached US$ 969 billion, imports reached US$ 791 billion. Statistics also show that exports growth is slightly slowing down (1.2%-points lower than 2005), while growth of import is increasing (2.4%-points up).
2. China’s furniture industry in the last five years
China’s furniture industry has witnessed high-speed development in the last five years, during which a complete production system and sizeable manufacturing capability have been set up. 2005 has seen a historical peak in output growth with the total production value reaching RMB340 billion (US$42 billion), up 28% compared with the previous year. The average growth rate for the last five years exceeds 20%.
China’s furniture exports for 2005 was valued at US$13.76 billion, up by 33% on 2004 and about four times more than in 2000. In comparison to the export figures, the total import of furniture, valued at US$0.68 billion for the year 2005, is still very small, but is gaining momentum as China’s furniture import duty has been reduced to zero.
For 2006 the trends remain: According to customs statistics, from January to November 2006 China’s furniture export value stands at US$15.75 billion, showing that growth is slower. China’s furniture import value is on a straight upward trend with a total US$0.8 billion expected for 2006 (up 18%).
For 2007, China’s total furniture production value is estimated to reach RMB435 billion ( US$55.8 billion) with growth close to 27%.
3. Features of China’s furniture industry
In summarizing the development of China’s furniture industry for the past five years, eight features can be identified, including both the common rules features of a developing industry and the distinctive “Chinese features”.
1. With the size of the industry increasing, a complete production system has been established. The availability of necessary supplies and technology has laid a solid foundation for the next five years’ development.
2. Product quality has improved significantly; enterprises are able to manufacture medium, high and top quality products, thus putting China on the map of international sourcing and outsourcing and OEM manufacturing.
3. Furniture design is gaining importance – the industry is increasingly investing into creativity and innovation. While young Chinese furniture designers are making their first appearance, famous international designers are also actively hired by China’s big furniture enterprises to apply international design trends.
4. The Chinese furniture industry has formed regional clusters all over China, with major importance in the provinces of Guangzhou, Shandong and Jiangsu. Northern China is catching up, specializing in solid wood and metal furniture (Hebei Province).
5. The management level of enterprises has greatly improved. With the appearance of highly professional managers, the industry is modernizing, moving away from family-run to modern management structures. Companies are upgrading their manufacturing technology and IT-infrastructures.
6. The world furniture industry continues shifting to China. In the meantime, exports are diversifying, increasing the scope of products and import countries. Companies manufacturing in China are now exporting to over 200 countries.
7. China’s furniture exhibition industry maintains a growing momentum and remains a driving force in increasing trade relations. The China International Furniture Expo in Shanghai has become a show of international recognition – its visitor and exhibitor figures growing by 20-30% annually.
8. China’s furniture distribution has also been upgraded with furniture shopping malls of different sizes and quality levels being built nationwide, providing an ever-increasing distribution network and covering the increasing domestic demand.
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