Facing difficulties with the US, Chinese businesses turn to Europe and Southeast Asia

Chinese manufacturers are scrambling to find new customers at home and abroad as trade tensions with the United States threaten their largest single export market.

The US-China trade war truce is still not enough to prevent a broader economic downturn in China - Photo: AFP

The Financial Times reported on June 22 that according to the latest trade data, China's exports to the US have fallen sharply after trade tensions between the two countries increased, while exports to alternative markets showed signs of growth.

However, this alternative path is not easy as competition increases, prices are squeezed, and profit margins in the domestic market are significantly lower.

Pivot to Europe and Southeast Asia

Statistics show that last May, exports from China to Europe increased by 12% compared to the same period last year, with exports to Germany alone increasing by 22%. Southeast Asian markets such as Vietnam, Indonesia and the Philippines also saw an increase of 15%.

In Zhejiang province - China's second-largest export region after Guangdong - many businesses are quickly looking to reduce their dependence on the US.

“We want to find new customers in markets like Europe,” said Xia Shukun, manager at Shaoxing Sulong Outdoor Technology, a maker of outdoor stoves. Previously, the company had only exported to Asia and the United States.

A similar situation is playing out at Shaoxing Shangyu Lihua Electronic Technology, a nail lamp manufacturer. Company manager Chen Zexin said the company’s export ratio to the US has dropped from 60% last year to just 30% this year.

The company is shifting to the domestic market, even though profits there are lower.

Despite the trade truce between the US and China, Mr. Tran said orders from the US are still very low. So his company is trying to sell through online channels such as Temu and reach customers in the Middle East and Europe.

But not all companies have had easy access to new markets. At a trade show in Las Vegas in March, the power tool maker Kimo said it had barely attracted any customers, even though Mr. Trump had just raised tariffs on China by 20%.

The company then decided to focus more on Europe, Russia and Southeast Asia - markets that are considered more stable in the current context.

China's exports to the US in May fell by 34.5% - the lowest level in the past 5 years - Photo: REUTERS

Increased competition

The shift of many factories that once focused on the US market to Europe is creating increased competition in alternative markets. The oversupply has left European customers with “too many choices”, driving down prices.

“This year has been the toughest ever,” said Vera Wu, founder of Ewing Tourism Products, which makes beach umbrellas for Lidl and Ikea. Her business is also under pressure as Chinese competitors, who previously exported to the US, are moving into Europe.

In Cixi city - known as China's "ball bearing capital" - some factories were forced to close after Mr. Trump imposed 25% tariffs on Beijing during his first term.

However, businesses have now found a new direction thanks to orders from Indonesia and the Philippines.

“The signal is clear, US-China relations are very chaotic. We have found new customers in Southeast Asia,” said a factory manager. “This time I don’t care about the US market anymore.”

Meanwhile, the European Union is also wary of the influx of Chinese goods into its markets. The European Commission has recorded a surge in imports of everything from guitars to industrial robots, with China being the main source.

"We are witnessing a new 'China shock'," European Commission President Ursula von der Leyen said at the G7 summit in Canada.

“As China’s economy slows, Beijing is flooding global markets with a surplus of subsidized products that its domestic market cannot absorb.”

Back to topic

HA DAO

Source: https://tuoitre.vn/gap-kho-voi-my-doanh-nghiep-trung-quoc-xoay-sang-chau-au-va-dong-nam-a-20250623110024737.htm