The eurozone crisis is setting the trend for China to shift away from western markets, making room for more export to its Asian neighbors, as well as Africa and Latin America.
Rapid growth in developing countries has drawn China’s attention, in what the Financial Times describes as “an important shift in global trade patterns”. China Confidential says “the trend is redrawing China’s trade map”. Chinese exports to developing markets climbed 17% in May, while exports to the EU fell 0.8% in the first five months of 2012, according to HSBC.
Changhong Electronics is seeking new markets in South Africa for its 50-inch plasma screens. Hong Kong based jewellery maker Polaris claimed exports to Europe fell 60% from 2008 while exports to Russia amounted to $35m compared to $10m to the US. Maisto, a toy manufacturer, focused on Latin America where demand is increasing for its cars. A growing demand for kitchen and home appliances is seen in Russia.
China Confidential predicts that Latin America could surpass the EU as China’s largest trading partner by 2017 if trade follows its current trajectory. Demand for Chinese exports, including capital goods, will increase because of their low prices, influenced by low labour costs, based on data from China’s economics research firm, Gavekal Dragonomics.
