Effects of the US government shutdown had already reached China by the time President Barack Obama signed a bill early morning Thursday, Oct. 17 that ended the shutdown and raised the debt ceiling.
Ten percent of the 112 exporters that participated in Global Sources’ survey conducted from Oct. 9 to 11 said they were already feeling the impact of the federal shutdown on their US business.
A much larger number of respondents (34 percent), however, thought that their business will be affected in the near future. This suggests a ripple effect of the shutdown will most likely be felt on China’s shipments to the US in the months ahead.
For China exporters that are already feeling the effects of the shutdown, the most conspicuous and immediate impact is the drop in recent orders from the US. Buyers there reduced purchases, wary of a slowdown in sales. Some suppliers have even experienced protracted deliveries and cancellations.
Despite this, nearly 60 percent of participants said they will monitor developments further before acting on slowing US business. At the time of the survey, the US Congress still could not agree on legislation that would keep the government funded.
The patience of China suppliers stems from their generally positive outlook. Comparing 2012 export sales and 2013 projections, many continue to consider the US a major revenue generator.
Meanwhile, other companies are already looking at ways to cope with slower US orders. More than 25 percent said they plan to shift focus to product categories not directly impacted by the shutdown. A few even thought of stopping US exports while they waited for the shutdown to be resolved.
All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.