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China_s furniture industry today

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									China’s Furniture Industry Today
Industry Demographics
The Chinese furniture industry is mainly distributed in four regions from south to north along the east coastline, with the south by far the busiest region. Together, the four regions contributed 90 percent of the industry’s total shipments and more than 80 percent of export shipments in 2003. Guangdong and Fujian, the top two furniture-producing regions in the south, combine to make up over half of total production and exports in terms of value of shipments. Boasting 6000 furniture companies, Guangdong alone claims more than 35 percent of the furniture industry’s total shipments and 50 percent of total export shipments each year. Zhejiang Province borders the largest Chinese market: Shanghai. It is the center for furniture manufacturing and distribution in East China. The region boasts a centuries-long furniture making history with spontaneously developed industrial concentrations of family workshops. The third-largest region includes Shandong Province, the metropolitan Beijing-Tianjin area, and Hebei Province in North China, representing 10 percent of total export values.

Global Development and Competitiveness
Most Chinese furniture products sold in export markets are lower priced compared to locally made products. Chinese products are increasingly targeted toward middle-to high-end markets and compete directly with local manufacturers. Lower Chinese labor costs are generally considered to be the major contributor to price advantages. Another key contributor to the Chinese manufacturers’ competitiveness is lower operational costs, which are the result of frugal manufacturing approaches and active adoption of automation. Chinese furniture companies generally face fewer environmental restrictions and spend less for health care benefits, which might also contribute to their competitive advantage.

Industry Tomorrow
The furniture industry in China has achieved fast growth during the past two decades with a traditional focus on low-cost commodity-style production. Recent developments suggest that Chinese manufacturers are now seeking new advantages through innovations in the areas of processing, products, and business systems. China is reported to have become the number one buyer of woodworking equipment

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among Asian countries, accounting for over 60 percent of total purchases. By pursuing automation, Chinese manufacturers have been able to save total production costs. Saving costs is the motivation for the Chinese furniture manufacturers to adopt technologies. Mass customization, a practice recommended as a way for foreign manufacturers to increase their competitiveness, is being tried by some Chinese manufacturers located in the Guangdong region. Meanwhile, surplus labor replaced by machinery will likely be consumed by the many smaller-sized companies pursuing specialty production that requires intensive hand work. New product development is also being increasingly pursued by Chinese furniture manufacturers. Current innovation activities within the Chinese furniture industry are mainly based on incremental improvements of existing products and technologies, rather than aggressive breakthroughs. This can be attributed to the industry’s traditional low-cost/low-profit production philosophy and the limited resources they have for innovation investments. Still, according to the industry insiders, innovation would increase significantly during the next decade ,resulting in sources of competitive advantage beyond the tradition of low costs. Conclusion After two decades of fast development, the Chinese furniture industry will continue to grow into the next decade, boosted by a large and pent-up domestic market. However, the upward momentum will likely be suppressed by limited raw material supplies and increasing competition from other countries. China furniture companies are seeking new strengths through innovation activities as they face increasing challenges.

Newsletter Southern China to get new home furnishings center First stage of $1.3 billion complex to open in 2009

FOSHAN, China — A new home furnishings complex is going up in Foshan, a home furnishings manufacturing center in the southern China province of Guangdong. The $1.3 billion complex will market and sell goods from 17 industries including furniture and bedding, accessories, and kitchen and bath. It will house space for

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showrooms, retail storefronts, and professional services ranging from logistics to warehousing and consulting. It also will have catering and entertainment facilities. Details about the size and number of buildings on the campus were unavailable. However a statement issued about the project said it will occupy about 57,500 acres of land and will be built in two phases over a three-year period. The first section will occupy just under half the land and is expected to be open as soon as October 2009. The project was announced by Zuo Naigiang, general director of the China Home Furnishings Expo Center and chairman of the Foshan Furniture Assn. Officials estimated that the Oct. 27 commencement ceremony was attended by more than 6,000 furniture and furnishings managers and directors from around the world. By China Daily

China furniture show adds home textiles CIFF set for March 18-21 in Guangzhou
GUANGZHOU, China — The next China International Furniture Fair here in March.2009 will include a home textile component. Intertextile Guangzhou Hometextile China will be held March 18-21 in Guangzhou in conjunction with the 23rd China International Furniture Fair. It will include some 200 textile and fabric manufacturers showing in a 200,000-square-foot exhibit area. The textile event is being organized by German-based trade show company Messe Frankfurt in conjunction with the China National Textile & Apparel Council, the China Foreign Trade Center, the China Home Textile Assn., the Sub-Council of the Textile Industry and the China Foreign Trade Guangzhou Exhibition Corp. The event will showcase goods produced primarily by manufacturers in the Zhejiang province, including Yuhang, Jiaxing, Shaoxing and Tongxiang. Zhejiang accounts for about 27% of the total home textile exports from China, according to Messe Frankfurt.

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CIFF will be held at the China Import and Export Fair Pazhou Complex in Guangzhou. It has nearly 5 million square feet of exhibit space, about 2.1 million of which is devoted to furniture. In addition to furniture and home textiles, the March 18-21 event also will include the China Outdoor & Leisure Fair, Homedecor & Housewares China, the China International Ceramics Exhibition and the China Kitchen Furniture and Appliance Fair. From March 27-30, the venue hosts an office furniture show and a woodworking machinery show. Information on the furniture show can be found at www.ciff-gz.com, or on Furniture/Today's calendar at http://www.furnituretoday.com/event/ By China Furniture Association

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