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Is China feeling the crunch at all? If not, will it?

Yes, of course it is. Here is a recent news story you may find interesting:
http://www.msnbc.msn.com/id/28037960/

China will definitely be feeling the crunch - no where near as bad as us, but increasingly more so. Obviously its factories make a lot of Western products, and if demand is low, this will have an adverse affect on their economy.

The recession has had an effect on China obviously but not all this is in the way that people think.

Yes factories have closed and exports are down, The Canton Fair is not as successful as in past years, but maybe it is now past its sell bye date anyway. However there is an interesting development that can profit Western companies who are brave enough and committed enough to go for it.
China has in the past a reputation for producing cheap products - we associate cheap with poor quality and that is often true. The recession has however brought home to Chinese companies how vulnerable this policy is. In times of recession people are interested in value and value must consider quality and innovation. The better Chinese companies have recognised this and are now very interested in making dramatic improvements in the way they develop, produce and market their products. Quality is now a word on many manufacturers lips. In addition to this there is a lot of pressure from Central Government to make environmental improvements. These are therefore growing markets in China and there seems to be money to make projects happen
But as the old saying goes "you have to be in it to win it" With China you have to work for any contracts, but the rewards are definitely there
Adrian

Update on China and the crunch !
China is still managing a growth rate of 8% which is holding up, largely as a result of the Government boosting the economy with a huge cash injection - real cash going into real projects.
As suspected earlier in the year, those Chinese companies who work on low margins have suffered badly. In addition to the tough conditions in the World economy China has also started to put in place some tough environmental, HR and the dreaded health and safety legislation. ( OK H&S is important, but don't you feel that sometimes in the UK we go a bit over the top.)
The result of the new legislation has lead to a new breed of Chinese manufacturer - one that wants to move up the value chain and wants to develop sustainable business relationships.
There is still a huge amount of disposal income here, examples of success are Mercedes - reporting a 50% increase on 2008 sales by September 2009 and the odd case of someone paying around 400,000 GBP for a dog ! they greeted it with a cavalcade of 30 Mercedes cars when it arrived at the airport - probably more cars that might greet President Obama !
Yes it is still tough but the signs are there that China is still one of the worlds exciting markets

Arrived in China at the beginning of 2010 and what a pleasant surprise after leaving the misery of the UK !
There is so much positive energy in both mainland China and Hong Kong. OK there is unemployment and they have 5 million graduates who cannot find jobs but the level of optimism is very noticable.

Our company has had more real enquiries in the last 4 weeks than in the last 2 years. There seems to be funding as the Chinese Government puts real money into real projects. Chinas exports have started to improve making it a close second to Germany as the worlds biggest exporter. However China still exports mostly low value goods. The new plan is to move up the value chain by making improvements to products and management and environment. This opens up a lot of opportunities for UK companies
Here is an extract from the Hong Kong Trader

4 Jan 2010
Chinese consumer confidence to keep growing
Chinese consumer confidence is expected to keep growing in the coming year as most consumers believe the recession is behind them, according to a survey released by global marketing research firm ACNielsen, the China Daily reported today.

The survey said that the Chinese consumer confidence remains strongest in East China and that central and western regions are getting more and more upbeat as well, due to increasing optimism in job and financial prospects.

The company recently questioned more than 3,000 shoppers across the country and found that, during the third quarter, overall consumer confidence grew 12 percentage points from the second quarter to 101.

The survey also said that the rebound in consumer confidence has not had much influence on saving habits and that consumers in first-tier cities are more likely to invest in stocks and bonds and plan holidays than consumers in less wealthy cities, said the newspaper. (exert from Hong Kong Trader)

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