global crisis impact on bike industries

1
global crisis impact on bike industries

• The background
• The question whether the global financial crisis
  will affect the Chinese economy is no longer
  doubted. The question is more on how and to what
  extend the Chinese bicycle industry will suffer.

2

• As the factory of the world, the Chinese can
  already see a sharp decline in demand for
  consumer products from abroad while the local
  market is more and more demanding higher quality
  products.

• Bike industry affected

Next to all that, anonymous sources in China
indicate that the Chinese central government is
reorganizing the local industry.
3

• Following the environmental commotion caused
  by the Olympics the Chinese government stands at
  the basis of closing down polluting companies
  simply by denying them credit. Numerous suppliers
  of the bike industry (like painting facilities)
  have been affected by this measure.

4

• On top of that bike industry is no longer
  considered as a priority industry by the central
  government and with that it has become more and
  more difficult for bike companies to get access
  to financial resources. As a result, Chinese bike
  companies are insisting on advanced payments by
  its foreign customers.

5

• This method has also reduced the demand for
  bikes from foreign countries and another reason
  for the demand decrease is that the bike company
  can not get enough money to sales its product and
  maintains its service. That is why many companies
  have to shut down.

6

• other related news
• It is not only the bicycle industry that is
  confronted with economic set-backs. Last Saturday
  Premier Wen Jiabao said, We must be aware that
  this year would be the worst in recent times for
  our economic development. The global downturn
  will continue to pressure the Chinese economy,
  which already faces a number of problems.

7

• The (global economic) situation is worsening,
  and the negative impact of the volatile
  international market on the Chinese economy would
  become more obvious as the days go by. Chinas
  economy expanded by 11.9 in 2007, but the growth
  rate slowed to 9 in the third quarter of this
  year, prompting many experts to suggest that the
  government take prompt steps to bolster economic
  growth.

8

• Expand domestic consumption
• Last week, Liu Tienan, Chinas Vice Minister
  of the National Development and Reform
  Commission, called for more government efforts to
  expand domestic consumption amid the global
  economic uncertainty while the fundamentals of
  Chinas economy are sound. He also stated that
  China should step up efforts in industrial
  restructuring, innovation and changing its
  development mode.

9

• Clear indications of less confidence in
  consumer spending are reported drop in value of
  contracts signed at the China Import and Export
  Fair in Guangzhou during the last two weeks. The
  overall volume has gone done by one third. It is
  reported that especially volumes in toys,
  furniture, hardware, tools, machinery, vehicles
  and spare parts declined .