The export value of refrigerators has grown 25.1 per cent to 47.85 billion yuan in the first eight months of the year. - AFP
CHONGQING: Soaring temperatures in summer have given China’s cool – or “qing liang” – economy a boost as exports of refrigerators, air-conditioners and fans hit new high, with South-East Asia becoming an increasingly attractive market.
Customs data released in September showed that the export value of refrigerators have grown 25.1 per cent to 47.85 billion yuan (US$6.8 billion) in the first eight months of the year, followed by electric fans at 22.5 per cent to 37.01 billion yuan and air conditioners at 19.6 per cent to 48.62 billion yuan.
This has contributed to an overall growth in export of household appliances, which recorded a rise of 17.2 per cent to 473.6 billion yuan over the same period in 2023.
There is no strict definition of cool economy in the country, but the term generally refers to products aimed at helping people cope with hot summers, including sun-protective clothing.
State media outlets also have used “qing liang jing ji” to describe trips made by the Chinese to cooler regions of the country during summer as well as the sales of ice-cream, cold drinks and even paper fans.
The world’s biggest factory has been relying heavily on exports to sustain its economic growth, as domestic demand remains soft amid a severe property downturn that has left the Chinese feeling poorer.
Retail sales in the country grew 2.1 per cent in August, missing expectations of a 2.5 per cent hike according to economists polled by media outlets Reuters and Bloomberg.
On Sept 24, the central bank cut a slew of rates – from mortgage loans to the amount of cash that banks must hold as reserve – in a move to boost both consumption and investment in the world’s second-largest economy.
Chinese firms that make home appliances are motivated to look beyond China’s borders for growth, given that households within the country are well-equipped with electronics.
“Demand in China for home appliances is closely tied to the property sector, and unless the sector improves, domestic demand will likely remain soft,” said Professor of Economics Albert Hu at the China-Europe International Business School in Shanghai.
Bo Zhengyuan, partner at Plenum research consultancy in Shanghai, said that Chinese home appliance makers have been engaging in price wars locally due to the soft domestic demand, and that exporting is a way to keep their profit margins.
Air-conditioner maker Gree Electric, for one, saw its exports in 2023 grow 7.8 per cent year-on-year to 70.84 million units, while net profit hit 29.01 billion yuan, a year-on-year increase of 18.41 per cent.
Consumer electronics firm Haier said in its 2023 annual report that its sales revenue for Europe spiked 23.9 per cent to 28.54 billion yuan, while figures for South-East Asia grew 11.6 per cent to 5.78 billion yuan.
The company said its air-conditioners are ranked No 1 in Thailand and Pakistan, and that it has grown its market share in South-East Asia, without going into specifics.
South-East Asia is a particularly attractive market due to its tropical climate and growing maturity of e-commerce channels, which gives Chinese firms another form of distribution channel, said Bo. South America and Africa are also areas of opportunities.
Asean is already China’s largest trading partner, with bilateral trade reaching US$911.7 billion in 2023, according to China’s Commerce Ministry.
A factory in Ningbo city in eastern Zhejiang province that makes portable electric fans told China Central Television that exports to South-East Asia have hit US$8 million for the first six months of 2024.
Overall, the company’s exports to South-East Asia between January and June have grown by 30 per cent, compared with the same period in 2023, to US$15 million.
It is not just home appliances that are popular exports. The Chinese have taken pride in the strides that the cooling economy has made, from the ancient bamboo mat to the modern facekini and “icy feel” anti-ultraviolet apparel.
In Singapore, entrepreneur Ada Guo imported Chinese sun-protective clothing brand Oh Sunny and opened a store at Causeway Point in Woodlands in November 2022 after noticing that some Singaporean women “may appear slightly older” than those in Hong Kong or mainland China, without elaborating.
Studies by the National University of Singapore and the National Environment Agency on the dangers of harmful ultraviolet rays convinced her there was a need and a market for sun-safe jackets, masks and arm sleeves.
Oh Sunny fabrics have been recommended by the Skin Cancer Foundation as an effective way for wearers to be protected against ultraviolet rays.
In about two years, Oh Sunny has opened four more stores in Wisma Atria, VivoCity, Junction 8 and Bugis+. A sixth store at IMM in Jurong is due to open in November.
“Oh Sunny has seen encouraging sales growth, reflecting the growing awareness among Singaporeans for sun-safe products that protect against harmful ultra-violet rays,” said Guo, general manager of Atticlo Singapore, which is Oh Sunny’s exclusive distributor in South-east Asia.
When asked about sales growth and stores’ revenue, Guo would only say that stores in Singapore have so far reported an average sales performance of $181 to $329 per square foot per month.
The growing demand for China’s cooling exports has also boosted research and development into cooling technologies.
Factories in China can now make machines that need half the usual time to make ice, from 12 minutes to six minutes, according to local reports.
A representative of a factory – also in Ningbo – which manufacturers such ice-makers told local media that exports between January and June 2024 have hit 110 million yuan, up 30 per cent compared with the same period in 2023. - The Straits Times/ANN
