China's "hanger capital" has held its ground partly through market diversification and technological upgrades despite uncertain U.S. trade policy since 2018, allowing it to stay resilient amid the latest around of tariff pressure from the United States.
Lipu, a county-level city in south China's Guangxi Zhuang Autonomous Region, is home to more than 300 enterprises which together produce about 4 billion hangers annually, with 80 percent exported to the U.S., Europe and Southeast Asia.
In response to uncertain U.S. trade policy since 2018, Lipu's entrepreneurs have expanded markets and invested in automation and other innovation to increase their resilience amid uncertainties.
Speaking with China Global Television Network (CGTN), business leaders from the local industry shared their insights into the recent U.S. tariff policies, and how their companies keep thriving through all the ups and downs in global trade.
"During the previous U.S. trade turmoil, we had already adjusted our company's customer strategy. So in this round of trade friction, I think we are prepared. Innovation has given us great confidence to cope with fluctuations in international markets, because we have strong manufacturing capabilities. Second, regarding market transformation, we consciously reduced our dependence on the U.S. market (since 2018). So now we have a wide range of markets. The U.S. market accounts for about 10 percent, the lowest among our markets. That's why the (tariff) impact isn't particularly significant," said Cai Gaoxu, general manager of Guilin Huahai Home Furnishing Products.
"All this turbulence by the U.S. hurts us, but it also hurts itself. Many of their purchasers have gone out of business. Their businesses are highly fragile. Their company could go bankrupt at any moment. From 2018 till now, over a dozen of my U.S. clients have gone bankrupt. In fact, U.S. clients themselves also don't want to go bankrupt. They are also striving to reduce tariffs through their associations or industrial and commercial light industry associations. We have spent over 30 years since the late 1980s to early 1990s honing our industry. We have firmly secured a leading position in the global hanger supply chain. Besides us, customers can't find better prices for hangers. So in this regard, I think we should be very confident and not afraid of challenges," said Mo Peng, chairman of Guilin Meihe Home Furnishing Products.
"As soon as the tariff policy was rolled out, the direct impact was a 10-to-15-percent increase in raw material costs. But some of our clients adopted a strategy of stockpiling inventory and placed orders immediately. So right after the new tariff policy was announced, we actually received some large orders. I think the market is also a process of reshuffling -- some disappear, while others emerge. We won't give up on the U.S. market. But of course, we must pay attention to protecting ourselves during cooperation and development. This time, we remain very calm about the tariffs. While tariffs change there, I will still maintain my pace. Even if clients ask if we can lower prices, I say no -- either take my hangers or not," said Mao Huilin, general manager of Guilin Maojia Crafts.
China's hanger producers express confidence amid US tariffs
