Global Sources just published the results of a survey of Chinese suppliers (Expect higher China prices in months ahead). I reproduced the most interesting findings:

The rising costs of materials & components are pushing export prices up:

More than 70 percent of the 232 respondents to a Global Sources survey increased export prices in 2010 in response to the rising cost of major raw materials and components.

Consumer products were the most affected, as 34 percent of surveyed suppliers in the line implemented 6 to 10 percent price hikes during the period. Seventeen percent raised quotes 11 to 20 percent.

In terms of geographic location, the majority of respondents based in the traditional hubs of Guangdong and Fujian provinces, and the Yangtze River Delta region increased prices up to 5 percent. Most of the surveyed manufacturers in China’s emerging production centers, however, raised quotes up to 10 percent.

Most suppliers see only two options: increasing prices or decreasing their margin. But things seem to be a bit different in the historic manufacturing hub of Guangdong:

Only Guangdong companies said they will concentrate on improving production efficiency first. One-third of suppliers based in the province chose this as the main step to deal with rising material costs. Increasing prices was a far second, an option chosen by 19 percent of respondents.

“One third”? I would guess the real proportion is below 10%. Let’s not forget that the suppliers listed on Global Sources’ directory tend to be large companies.

Of course, the rise of the RMB also contributes to push prices up. But, at the same time, it decreases the costs of imported materials. Not surprisingly, the suppliers deny this positive effect:

Two-thirds of respondents said up to 10 percent of their major materials and components are imported. Only 12 percent, however, purchase directly from the overseas suppliers. The bulk of key materials are still sourced locally, whether from domestic providers or authorized agents and distributors.

Nearly 70 percent of consumer goods manufacturers said 10 percent or less of key materials are made overseas.

I love this kind of data. Looking forward to more surveys from Global Sources…