Santa's sleigh brings restored order to SMEs

Jiang Kexing, the manager of Zhejiang Hongxu Trading Co Ltd in Yiwu, Zhejiang province, didn't need the official PMI data to tell him business outlook was improving.

In an interview with China Daily, the small goods manufacturer in this mega-market town said that he had "the hunch" as early as last summer, when orders for the Christmas season began to flood in, especially from the United States. Demand from Europe has remained sluggish, Jiang said. But slack sales to Europe were "more than made up, by the increase from the US," he said.

A stall owner shows to an international trader Christmas decorations in Yiwu. Business men in the manufacturing center see orders for Christmas season from North America bounce back. [Photo/Xinhua]

The increase came as quite a surprise to Jiang and the many thousands of private-sector manufacturers in the region. "We worked overtime to meet the tight delivery schedules," he said, with some help from the bureaucracy.

A new policy introduced by the Zhejiang government has greatly shortened the time to export processing of Custom's declarations. And that was a great help, according to Jiang.

"It used to take at least half an hour for the clearance to be completed by staff, not counting the time standing in queues, while it only needs a few minutes through a machine now," said Jiang.

Jiang added that it had been a tough year because of anemic overseas orders, and it came as a great relief that he got a flood of Christmas orders over a short time, and the business year will end on a happy note.

Most businesses in Yiwu are getting ready for the pre-Christmas peak. Yiwu is renowned as a commodity trade center.

According to the latest statistics released by the Customs Department, the value of products for Christmas passing the Yiwu Customs District during the first eight months, exceeded $79 million, 77.3 percent higher than last year.

"Although we have been affected by the European crisis, the demand for Christmas still brought us back on track quickly, in the middle of year," said Jiang.

Jiang added that he hoped the return of strong Christmas sales, will set the stage for a more profitable year in 2013.

There are more promising signs for small and medium-sized trading enterprises in China. They've been struggling with diminished orders and lower profits over the past year, continuously affected by the gloomy global economy.

The economy regained some manufacturing momentum, according to the purchasing managers' index, which indicated an expansion in factory output.

The PMI hit 50.2 in October, up from 49.8 in September and 49.2 in August, according to latest figures released by the National Bureau of Statistics on Nov 1.

A reading above 50 shows an expansion in manufacturing, suggesting that the upturn may fuel more robust business in the coming months.

"The sales volume for the third quarter is better than the first two quarters, although it is much lower when compared to the same time last year," said Shen Jiandong, the senior sales manager for Jiangsu Goldsun Textile Science and Technology Co Ltd.