Coronavirus impact on China’s exports may have been underestimated amid Guangdong outbreak, analysts say
- Some firms across the southern manufacturing hub of Guangdong are worried about losing orders to other factories in China if sporadic outbreaks persist
- Strict coronavirus-control measures in Guangdong have had a serious impact on container throughput at various ports
The coronavirus outbreak in Guangdong province has placed “huge” psychological pressure on small and medium-sized enterprises across China’s manufacturing hub, and some fear they might lose orders to other factories across the country.
This comes as parts of the province, which accounts for about 10 per cent of China’s economic output, have recently been ravaged by a confluence of setbacks – surging commodity prices and shipping fees; an electricity shortage; and troublesome lockdowns associated with Covid-19.
Huang Weijie, who runs several wholesale shops in Guangzhou and a factory in Yangjiang, said many local factories – especially smaller ones – are in a state of semi-suspension, as wholesale markets have been closed since the end of May.
“Consumption activities in several major cities in Guangdong from May to July will certainly go down to a very low level, which means the summer clothing sales season has passed and will certainly lead to an increase in factory inventories,” Huang said.
Making matters worse, the impact of the recent outbreak on the country’s exports may have been underestimated, as analysts with Soochow Securities are now estimating that China’s year-on-year export growth in June will be 16.4 per cent, much lower than many analysts’ projections of nearly 25 per cent.
