China's Next Export Could Be Inflation As Its Own Costs Rise
The world's biggest microwave-oven maker complains that it can no longer profit doing business with the U.S.'s largest retailer, Wal-Mart Stores Inc.
"Wal-Mart is only price, price, price," says David Shen, marketing director of Chinese appliance maker Guangdong Galanz Enterprise. He says his company will ship 14 million ovens this year, 700,000 of them to Wal-Mart under other brands from which it will earn no profit.
With global oil and commodity prices soaring, Chinese manufacturers are being squeezed like never before. And unless commodity prices start to ease soon, some economists believe that China's next big export to the U.S. will be in the form of rising inflation.
Some economists have long argued that the ability of Chinese firms like Galanz to absorb cost increases has provided a cushion against inflation for the rest of the world. By not passing along in full the rising costs of oil, steel, copper, zinc and other items, these companies are helping to sustain one of the key supports of global economic growth: the big-spending U.S. consumer.
With a population of 1.3 billion and a pool of surplus rural labor officially estimated at 150 million, there has been ample scope for Chinese manufacturers to keep prices low by screwing down labor and other costs. Rising productivity has helped pad the bottom line. U.S. officials complain that China has been supporting its exporters by pegging its currency to the U.S. dollar, thereby keeping prices unfairly low. China recently has been signaling a readiness to relax the tight peg to the dollar.
But at this year's Canton Trade Fair, held here in the southern city of Guangzhou, a number of Chinese manufacturers said they are starting to run out of ways to keep a lid on prices -- and that has implications for the U.S. "Chinese prices are the lowest on the street," says Dong Tao, chief Asia economist at CSFB. "If China manages to raise prices to the U.S.," it could provide room for non-Chinese manufacturers to raise prices, too, and soon you have the beginning of an inflationary cycle.
Some Chinese manufacturers are coming up with strategies to nudge factory-gate prices higher without scaring off customers. Yinhe Motorcycle has added new safety features to its four-wheeled All Terrain Vehicles for children, including a remote control that allows parents, while overseeing their children, to cut the engine. New features don't cost much to develop but give the sales force more leverage, says general manager Huang Qixin.
Tiger Wang, a manager at Guangzhou Flashlight Industrial Corp., says his company is ramping up production of rechargeable and keychain flashlights, which are gaining popularity. "We've never had this kind of pricing pressure before," says Mr. Wang. But innovation in a low-tech product can only go so far. The state-owned company is now shedding workers by accelerating its retirement plan, and through strides in productivity. In the past, one worker looked after one machine that stamps metal flashlight barrels; now one worker feeds 10 machines, says Mr. Wang.
It isn't just raw-material costs that pressure Chinese suppliers of everything from brass door knobs to car radios: Power, water and transport charges are also going up. (See related article.) So, too, are wage demands. The Pearl River Delta, home of the Canton Trade Fair, is short an estimated two million workers as factory employees vote with their feet against uncompetitive pay in the region.
China's exports accounted for 10% of all exports to the U.S. last year, notes Huang Yiping, Citigroup's China economist. That equates to 1.4% of U.S. gross domestic product and 2% of total personal-consumption expenditure. "The impact of China is still relatively small," Mr. Huang says, adding that it's a "big hypothesis" to suggest China could influence U.S. inflation. And even if inflation in the U.S. does pick up a little, it would be starting from such a small base. Despite rising oil prices, consumer prices in the U.S. rose a modest 0.2% in September.
Nevertheless, some economists are starting to worry. "When push comes to shove, I'm betting you will see a combination of margin squeeze, but also higher prices," says Jonathan Anderson, chief Asia economist for UBS.
Mr. Shen says Galanz started selling its bottom-of-the-line microwaves to Wal-Mart two years ago at below cost to get a foot in the door. It hoped eventually to sell more-sophisticated models at a profit. But Galanz, which boasts it has 35% of global microwave sales, hadn't counted on paying 90% more for plastic and 30% more for steel over the past year.
In a written response to questions about Galanz, Wal-Mart said it recently asked Galanz to quote a price for ovens, but the quoted price was higher than all its competitors, and a purchase decision hasn't yet been made.
"Every year Wal-Mart is pushing the price down," Mr. Shen says, adding that it has reached the point where Galanz is rationing pens to its office staff to save a few pennies -- and customers will have to pay more for its microwaves. "If they can accept, we'll continue. If they can't, we'll stop," he says.
中国制造商感受压价之痛
世界最大的微波炉生产商抱怨说，与美国最大的零售商沃尔玛连锁公司(Wal-Mart Stores Inc.)作生意已难以盈利。
中国家电生产商广东格兰仕企业集团公司(Guangdong Galanz Enterprise)的销售总监沈朝辉(David Shen)说，沃尔玛强调的总是价格、价格、价格。他说，格兰仕今年的微波炉发货量为1,400万台，其中70万台是挂著其他品牌发送给沃尔玛的，而从这些产品上格兰仕已无利可赚。
随著全球石油和商品价格的飙升，中国制造商的利润受到了前所未有的挤压。一些经济学家相信，除非商品价格很快开始回落，中国对美国的下一宗大额出口产品将是不断上涨的通货膨胀。
一些经济学家早就声称，正因为像格兰仕这类中国企业有能力消化不断增加的成本，才使全世界在抗拒通货膨胀压力方面获得了一个缓冲。通过分担石油、钢铁、铜、锌和其他产品不断上涨的成本，这些中国企业正在帮助维持支撑全球经济增长的一支重要力量：美国消费者的慷慨支出。
中国的13亿人口以及大量农村剩余劳动力（据官方估计有1.5亿人）的存在，使中国的制造商一直可以轻而易举地通过压低劳动力和其他成本而将产品价格保持在低水平。不断提高的生产率水平则是它们的利润之源。美国官员抱怨说，通过将人民币汇率与美元挂钩，中国使自己出口产品的价格人为处于低水平，从而使本国的出口商获得了支持。不过最近已有迹象显示，中国准备放宽人民币兑美元的波动区间。
然而在今年的“广交会”上，许多中国的制造商都表示，他们在控制价格上涨方面已变得无能为力，而这种局面势必对美国产生影响。瑞士信贷第一波士顿(CSFB)的首席经济学家陶冬说，中国的价格是市场上最低的，如果中国的输美产品提价，就为其他国家的制造商上调价格创造了空间，因而一个通货膨胀周期很快就将开始。
中国部分制造商正采取的一项策略是，在不吓跑客户的前提下小幅上调产品的出厂价格。银河摩托车实业有限公司(Yinhe Motorcycle)已为其供儿童使用的四轮全履带机动车(All Terrain Vehicles)新增了安全功能，其中包括远程控制功能，可使父母通过遥控方式让子女驾驶的摩托车熄火。该公司总经理说，新功能的开发成本并不高，但却使销售人员有了更多的提价理由。
广州市电筒工业公司(Guangzhou Flashlight Industrial Corp.)的经理王虎(音)说，该公司正在加紧生产可充电手电筒和钥匙链手电筒，这类产品现在十分流行。他说，公司从未承受过现在这样大的价格压力。但低技术产品的创新余地并不大。这家国有企业正在通过加快推进退休计划来裁减员工，并努力在提高劳动生产率方面取得显著进展。以往，一位工人只负责操作一台手电筒金属筒压制机，而现在却需同时操作十台机器。
从铜门把手生产者到汽车收音机制造商，中国的各类供应商目前都承受著价格上涨压力，而造成这一压力的并不仅仅是原材料成本上涨。电力、水和运输成本也在上涨。工资成本也是这样。珠江三角洲地区目前约缺少200万名工人，由于这一地区的工资水平不具竞争力，用脚投票的工人选择了离开。
花旗集团(Citigroup)的中国经济师黄益平说，中国去年的输美产品占美国当年总进口额的10%。这一数额相当于美国国内生产总值的1.4%，相当于美国个人消费总支出的2%。黄益平认为，中国对美国的价格影响仍然不大，那种认为中国将影响到美国通货膨胀形势的想法是一种“大胆的假设”。即使美国的通货膨胀率有所上扬，鉴于基数很低，造成的影响也不会大。不包括油价，美国9月份的消费者价格指数只温和上涨了0.2%。
然而一些经济学家却已开始忧心忡忡。瑞士银行(UBS)的首席亚洲经济师乔纳森?安德森(Jonathan Anderson)说，随著企业的利润率被不断压低，涨价将成为不可避免之事。
格兰仕的沈朝辉说，该公司两年前开始以低于成本的价格向沃尔玛出售最简易的微波炉，以期在美国市场取得立足点。格兰仕曾希望有朝一日它能向沃尔玛出售功能更复杂的微波炉，从而可以赚取利润。然而令这家自称占有全球微波炉市场35%的公司始料未及的是，过去一年中塑料成本上涨了90%，而钢材产品上涨了30%。
沃尔玛在对有关格兰仕问题的书面答复中称，它最近曾要求格兰仕提供微波炉报价，但该公司给出的报价比其竞争对手都要高，因此沃尔玛尚未作出从该公司采购微波炉的决定。
沈朝辉说，沃尔玛每年都要压低价格，这逼得格兰仕为了降低成本不得不对办公室文员的用笔实行定量供应，这意味著消费者必须要为微波炉支付更高的价钱了。他说，如果消费者能够接受涨价，格兰仕还可继续供货，如果他们不能，那格兰仕只好停止供货了。
