Chinese Furniture Exports Increase Despite Higher Costs

According to China Customs statistics, from January to February 2012, China's exports of furniture and its parts totaled USD 5.51 billion, up 2.8% year-on-year. However, in the first half of 2012, exports of furniture and its parts totaled USD 22.46 billion, dramatically up 26.1% year-on-year.

In the past few years, Chinese furniture manufacturers continue to persevere at a time when China's competitiveness is in doubt and importers move to countries like Vietnam, Pakistan, Cambodia and Bangladesh for lower costs.

Furniture export continues to boost despite recent wage increases and slowing international demands. Manufacturers produce higher-value items, upgrade operations and increase profits.

China furniture products keep capturing overseas market share after last global economy recession. Even though labor is becoming more expensive, it's still much cheaper than in the U.S. and Europe. Therefore, the price to quality ratio remains favorable for production in China.

Interestingly, prices of exports from other countries have been rising faster than Chinese exports. For instance, prices for Chinese exports increased 21 percent since 2005, which is less than the 32 percent increase of goods from India, and the 33 percent increase on exports from Mexico over the same period.

China seems to be strengthening its position in the global supply chain. China is currently the world's largest exporter. Its share of global exports expanded during the recent global meltdown, with an increase to 10.7 percent in 2011 from nearly 9 percent in 2008.

China is not satisfied to remain the primary source of cheap low-end products, for which its manufacturers receive a mere fraction of the final cost. The country's fastest-growing category of exports is heavy machinery such as tractors, turbines and automobiles. China's corporate sector wants to climb the value chain and build its brands.