China-Factories Need A Greenback Christmas!

Bloomberg Businessweek August 31, 2020 pp12-13 |Business| “China’s Factories Need A Little Christmas”. “Now that the global reopening boom is fading, they’re counting on holiday cheer to boost sales”. THE BOTTOMLINE “Although exports are a declining share of China’s economy, its factories still rely heavily on global consumer demand. So holiday season orders are being closely watched”.



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Data Presented

U.S. monthly imports of consumer goods, seasonally adjusted hit $56B in July 2019 and fell to $44B in June 2020 but have rebounded as of now to just over $50B. Chinese industrial capacity utilization was about 77% Q3 2019 and fell to 67% by Q2 2020 but has rebound now to about 74%. “China’s exports rose 7.2% in dollar terms” for YOY July due to electronics, anti-coronavirus supplies, furniture and toys. Exports to America were up 12.5% YOY July. “Producer prices have fallen 2.4%” July YOY.

Various industry officials commented.

Dave Cave (Dragon-I Toys) “Nobody has canceled any orders in the last six to eight weeks, so everybody is being very optimistic that Christmas will happen”

Justin Yu (Pinghu Mijia Child Product) “Our factory is running overtime” “Although the pandemic is very serious, people still look forward to Christmas”

Andi Feng (Bigger Tang) “Even looking ahead to Christmas, many people still don’t feel comfortable to attend large events or parties” “That could be the reason why gifts are selling well, while a company like us that makes decorations is still struggling”

Mark Ma (Seabay International Freight Forwarding Ltd.) As people look to avoid public transportation, sales of bicycles have increased. “This year our peak season was delayed by the pandemic disruptions, but we’re seeing it here now”

Willie Tan (Topchoice). This maker of ceramic tableware sees strengthening demand only from Asia. “We are hoping that during September and October people need immediate deliveries [for Christmas] it will be a big problem [if such orders don’t happen]”

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