Brand, design remain key

International traders negotiating deals at Canton Fair. Net exports accounted for 9 percent of GDP growth in 2012, according to the General Administration of Customs. [Photo / China Daily]

Under-pressure exporters aim to rekindle fortunes

Chinese exporters are keen to develop a new competitive edge through brand-building and technological development amid grim export prospects this year.

"Export businesses are now finding life much harder than before the financial crisis of 2008," Wang Hongren, general manager of jetting machine company Zhejiang Danau Industries Ltd, told China Daily during the 113th Canton Fair.

The fair opened in Guangzhou on April 15 and closed on Sunday.

Gao Yue, sales manager for international business group Foshan Oceano Ceramics Co Ltd, said: "Our traditional advantage is lower prices than overseas sellers, and bulk shipments to overseas markets earn us remarkable profits despite of narrow profit margins.

"But the traditional advantage is vanishing owing to the rising renminbi and increasing costs for labor, wages and raw materials. Meanwhile, orders from major markets remain sluggish."

Vice-Minister of Commerce and China International Trade Representative Zhong Shan urged exporters during the fair to build up a new competitive edge, supported by technology, branding, quality and services.

Gao said: "Building a brand is a long-term as well as costly process, but is also a step that we must take because we have no other choice for survival."

China is the world's largest exporter and second-largest importer, with expanding trade playing a significant role in its economy.

Net exports accounted for 9 percent of GDP growth in 2012, according to the General Administration of Customs, and the country's foreign trade dependence ratio - the degree of an economy's dependence on foreign trade - dropped 3.1 percentage points to 47 percent in 2012, but still outstripped the 30 percent in the US, Japan and Brazil.

The new leadership outlined an 8 percent trade growth target for 2013 after 6.2 percent growth in 2012 trailed a 10 percent target.

Feng Xuelei, sales director of Ecovacs Robotics (Suzhou) Co Ltd, said: "We are first an original equipment manufacturer for the world's top vacuum cleaner brands, but fierce competition forced us to develop our own product seven years ago - the automatic window cleaner, which we named Winbot."

The company started overseas sales three years ago and has established branches in Los Angeles and Dusseldorf. Overseas orders in the first quarter of this year rose 30 percent from a year earlier and are expected to grow 40 percent for the whole year, much higher than the 25 percent sales growth in 2012, Feng said.

College links

"Independent innovation is the foundation for our own brand," Feng said. "With a research team of more than 200, we invest 5 percent to 10 percent of annual sales each year in technology innovation.

"The innovation and industrial design are all completed jointly with colleges in Nanjing, Jiangsu province."

Wang Hongren said innovation brings pricing power and increased sales to developed markets despite the debt crisis.

"Thanks to the debt crisis, budget-tightened buyers in the US, Japan and EU increased purchases of our products," Wang said.

"The function and external features of our machines are basically the same as the products in Japan or Italy owing to improvements in equipment standards and raw-material use. Despite price increases in recent years, our prices are still competitive or just half those of Japanese products."