Article Analysis: Chinese Exporters' Weakness at Fair Points to Broader Economic Anxiety

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Keith Bradsher's article (2012) about weakness at the Chinese export fair in Guangzhou highlights how different macroeconomic variables can affect international business. Bradsher notes that orders from Europe and North America are down for Chinese exporters. While there is disagreement about the exact cause, there is speculation about several variables. Many Western economies have struggled in the past couple of months as their economies have seen a faltering recovery. In addition, the Chinese renminbi is on a long-run appreciation, meaning that the Chinese exporters are starting to see their competitiveness reduced. A third factor is domestic to China, where wages and rents are rising quickly in key manufacturing areas such a Guangdong Province, the area around Shanghai and the Yangtze delta and the area around Beijing. At times, workers and rents are rising more quickly than the yuan is appreciating, setting the course for the long-run appreciation of the currency against the dollar. The article highlights some of the different factors that go into international trade. The companies in question have built their businesses around export, and that carries with it certain risks. There are product-related risks, for example if the picnicking backpacks at the beginning of the article do not meet a specific need in the West, or are too specialized. There are price issues. China has built an incredible export business based on being a low cost producer. Three of the factors

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