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SFCHINA ’09 Shows Resilience in the Wake of Global Recession


Metal Finishing

More than 11,000 visitors converged on the Shanghai New International Expo Centre Nov. 18–20 to attend SFCHINA ’09, billed as China’s foremost exposition and conference for electroplaters, suppliers of surface finishing chemicals and equipment, as well as coating formulators and manufacturers of paint delivery systems.

The robust participation marks a 10.2% increase over of the 2008 event, held in Guangzhou—statistics made even more meaningful despite a 5.5% reduction in attendance from visitors outside China, including a few prominent U.S. exhibitors. According to Sinostar International,, which manages the show, the strength of the participation from attendees and exhibitors alike is noteworthy given the fact that the event took place amidst the aftermath of a global recession. Raymond Ho, Sinostar’s executive director, believes this is an indication that the manufacturing sector in China is showing signs of resilience in the face of a worldwide economic downturn.

Many of the more-than 300 companies that exhibited at the event are in agreement. At the bustling Univertical booth, Chuck Walker, CEO, reports business is brisk, citing output from the company’s firmly established facility in Suzhou. Across Hall E at the Pavco/Everfast space, Rod Martens, who heads up Asia sales, reports the company’s China business is up 30% year over year. This, he noted, is largely due to strong demand from the automotive sector.

It’s not just market for cars that’s been cooking for the major players in China’s surface finishing industry. Exhibitors like Stanley Tam, Plating Process Systems, and Joseph Chianale, Coventya, also see activity from key sectors such as electronics, hardware and decorative. There’s also been fervent purchasing activity on the coatings and equipment side of the business, according to Andy Cheng of ITW-Gema, particularly for modular painting systems.

Assessments such as these should come as no surprise, given the nearly $600 billion in stimulus money currently in circulation in China. The hefty government funds, subsidies and rebates are not only keeping the automotive factories humming, but the money is also working its way down to the banks, which are aggressively issuing loans. Reports of Chinese consumers descending on dealerships with cash in hand are commonplace. And for the first time, economists say, Chinese consumers bought more cars than Americans—12.8 million units vs. just under an estimated 11 million in 2009.

In a recent New York Times article 1John Bonnell, the director of Asia vehicle forecasting at J.D. Power & Associates, noted: “The Chinese market is “on full tilt—booming is an understatement these days.” China is pulling ahead at this particular moment, he added, in part because debt-burdened, credit-seeking Americans are worried about their jobs and are, subsequently, pulling back. After decades of “gorging on consumption,” as the article states, Americans are saving more (4.7% savings rate as of November 2009 vs. less than 1% in the spring of 2008).2 Conversely, the Chinese, whom economists thought were addicted to saving, are spending more of their disposable income.

Generally speaking, China is surpassing the United States as the world’s biggest market for a variety of durable goods. For instance, appliance manufacturers expect to sell 185 million refrigerators, washing machines and other pieces of kitchen and laundry equipment in China this year, compared with 137 million in the American market. In desktop computers, China moved solidly ahead of the United States in the third quarter, buying 7.2 million units compared with 6.6 million in the United States. Additionally, retail sales are growing 17% a year in China after adjusting for inflation, almost twice as fast as the overall economy.

China, for the first time, is the driver helping to pull the global economy out of a slump, economists noted. In past economic downturns, the world looked to the U.S. to provide that lift. “The finishing industry in China is very good now,” Sinostar’s Ho said. “We are maintaining a strong GDP [up more than 8% for 2009]. We have not been impacted by the crisis.”

(For more on this story, see the February issue of Metal Finishing.)

REFERENCES
  1. “Recession Elsewhere, but It’s Booming in China,” by Keith Bradsher, The New York Times, Dec. 10, 2009. 
  2. Personal saving as a percentage of disposable personal income, as calculated by the Bureau of Economic Analysis.
     

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