CHINA'S TUMBLING PRICES PUSH SOME EXPORTERS TO THE BRINK
Kris Lin, the owner of a lighting factory in China, was confronted with a difficult decision when he received the first order of the year from a longstanding overseas client. He found himself in a predicament: either accept the order at a loss or instruct workers not to return after the Lunar New Year holiday.
The prolonged deflation in factory prices poses a significant threat to the survival of smaller Chinese exporters like Lin, who are caught in intense price competition for dwindling business. Factors such as higher interest rates abroad and increasing trade protectionism are putting pressure on demand, exacerbating the challenges faced by these exporters.