DONGGUAN, China – Danny Lau’s aluminum-coating factory in Dongguan, China is facing difficulties due to the escalating trade war between the U.S. and China. Lau set up the factory in mainland China in the 1990s to take advantage of lower manufacturing costs. However, with tariffs on his products reaching 75%, Lau is finding it hard to sustain his business. One third of his clients are from the U.S., but some are reconsidering sourcing from him due to the high tariffs.
In response to the trade war, Lau’s company has started exploring new markets, with a focus on the Middle East. However, Lau believes that replacing the U.S. market will be difficult as it offers high quality demand and punctual delivery. On the other hand, one VR equipment and game company, Zhuoyuan VR Tech, has successfully expanded to Southeast Asia, Latin America, and the Middle East, reducing its dependence on the U.S. market.
As a result of the COVID-19 pandemic, Zhuoyuan VR Tech has seen a decrease in business from the U.S., with less than 10% of their orders coming from the country. They have shifted their focus to developing economies, with India emerging as one of their biggest export markets. Overall, half of the company’s orders now come from countries outside China, particularly in the Asia-Pacific region.
The impact of the trade war and the pandemic has forced Chinese exporters like Lau and Zhuoyuan VR Tech to adapt and find new markets to sustain their businesses. The future remains uncertain, but these companies are resiliently exploring opportunities in new regions to navigate through the challenging economic environment.
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