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Chinese exporters look to domestic market as foreign orders dwindle
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15:23, October 20, 2008

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Chinese exporters, faced with dwindling foreign orders amid global economic slowdown, are diverting their attention to domestic markets.

At the ongoing Canton Fair, China's leading trade fair, businesses that canvass foreign buyers are also focusing on the local market as their customers in the Western nations are dragged into recession by the global credit crisis.

Qiao Guan, board chairman of the Jiangsu Hotwind Sauna Equipment, said his company is planning to divert some of the business from abroad to the domestic market.

The company's sales in the United States, which accounted for about 30 percent of its total exports, had dropped by more than 20 percent this year, Qiao said.

He hoped the local sales could compensate the decreasing orders in the foreign market. "We have completed research on the domestic market, which shows some exported goods are affordable and have good sales prospects in the local market," he said.

The Himin Solar Energy Group, based in east China's Shandong Province, produces solar water heaters that are sold both at home and abroad. Xue Xinwen, head of the firm's international trade department, said the company had been losing orders as some Western countries canceled subsidies on environment-friendly imports.

"We have sent more staff to market our products to local infrastructure authorities and companies," he said.

"Domestic consumption has been greatly boosted by a robustly growing economy, creating positive situations for exporters to go local," he said.

But the readjustment can be difficult.

Li Jianlan, a worker with Wanji Plumbing Materials Co. Ltd, based in Ningbo, said an exclusive exporter like her company lacked channels and brand loyalty in the domestic market. "These are two different kinds of markets, and it takes a lot of work to be familiar with the ways business is done with local buyers," she said.

Some goods that are made for export are deemed too expensive for Chinese buyers.

Huang Yan, general manager of the L-bright Export Manufacture Corporation, said it had been very difficult to sell its products to domestic buyers as they lacked a price advantage.

Local governments, aware of the trend, are taking action to encourage the conversions. Guangdong Province, the country's major exporting base, issued a notice in June, ordering local quality inspection authorities to provide needed technical assistance to exporters.


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