China’s home appliance manufacturers left cursing export orders as costs rise, profits vanish amid yuan rally Cissy Zhoucissy.zhou@scmp.com Backed by a strong external demand, China’s home appliance exports enjoyed a V-shaped recovery last year, with exports rising by 20.6 per cent year on year in the first 11 months of 2020. Photo: Reuters
Faced with a perfect storm of a strong yuan and the rising cost of raw materials, China s home appliance manufacturers are fearful of booming exports orders caused by the coronavirus as profits decline, leaving some on the verge of bankruptcy.
On one hand, overseas demand for appliances is rising amid lockdowns and work from home arrangements in the West, but on the other, firms are seeing profits vanish as the Chinese yuan continues to rise, meaning they will receive less for the orders which already cost more to produce due to rising copper, aluminium and cold rolled sheet steel prices.