United States imports of wooden furniture
Data from Statistics Canada (1) indicate that China will surpass Canada as the major exporter of wooden furniture to the United States by 2004 (above chart). Other sources (2) using data for all furniture products (including parts) show that Canada is already number two.
China's dramatic increase in furniture exports and domestic production can be traced to a number of factors/policies:
A "structured" economy that avoided the worst of the recent Asian economic crisis
Development of special economic zones such as the city of Shenzhen (adjacent to Hong Kong) (3)
Joint ventures with foreign companies to establish manufacturing facilities
Negotiations for admission into the World Trade Organization (WTO)
Low American/Canadian import tariffs
Ikea opened retail stores in Shanghai (1995) and Beijing (1999) and according to reports is expected to break even in the next couple of years.
Bo Concept opened its first store in 1995 and now operates 20+ retail outlets and seven factories in China.
Haworth Office furniture manufacturer opened a Shanghai manufacturing plant in 1997.
China's pending acceptance into the WTO (expected later this year but recent reports mention delays) (6) will benefit the Chinese elite, large financial institutions, global corporations and urban manufacturing centres. The automated, state-sanctioned furniture factories will flourish while millions of hand-crafted furniture producers in rural areas will be forced to close. Internationally, low WTO tariffs, sympathetic financing and state support will allow China's favoured 10 percent to flood the North American market with mass-produced furniture. This surge in imports will have a negative impact on Canada's furniture industry which, like China's, is also predominately family-owned. (7)
Despite the claims from "free trade" advocates that North American producers will benefit from the opening up of the huge China market, recent trade figures show a decline in furniture imports. Only the small, elite sector can afford Western products, and, despite WTO negotiations, imported furniture still faces large tariffs, taxes and bureaucratic paper work.
How does the smaller-scale manufacturer in Canada cope with global competition? Those wishing to sell directly into China should find an agent in Hong Kong conversant with the vagaries of the Chinese import "paper trail." On the home front, smaller-scale Canadian manufacturers should be developing innovative design-based products, flexible production and a trained workforce to take on the challenge.
© furniturelink 2001 (text and images)