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In South East Asia (Philippines, Indonesia, Malaysia, Singapore, Thailand), Korea
and Taiwan. The seven countries have a combined furniture production of about
US$ 12,137 million. Korea and Taiwan are by far the largest furniture markets
and the main furniture consumers in Asia. Asian furniture have also been popular
in developed countries like USA, Europe and Australia.
As for the Malaysian furniture industry, it has been on a steady upsurge since 1999.
Furniture production fuelled by export demands reached an estimated USD1,828 million in 2000.
Leading overseas importers are the United States, Germany, France, the
United Kingdom, Japan and Canada.
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In Malaysia, there are more than 750
furniture manufacturing and export companies, with another 1,500 smaller
concerns playing a supporting role. Under the government’s second Master Plan
(1996-2005), the Malaysian Furniture industry has been identified as a "target
industry" and is now one of the new growth sectors of the economy.
The Malaysian furniture industry has used
for a long time the productive model designs suggested by their foreign buyers.
Over the years this knowledge has facilitated the production of western-style
products and demand for local products has constantly increased.
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The future of Asian Furniture exports
Asia in recent years has experienced a major surge in the demand for its manufactured goods from the world’s largest markets in the United States and Japan. One sector which has benefited from this increase in demand is asian furniture. For example, in 1990 the United States, the largest market for imported asian furniture, purchased about 1.7 billion dollars worth of asian furniture from Asian nations. In the year 2000 this number had grown to over 7 billion and by 2004 had nearly doubled over these four years.
Breaking this trend down by nation, China and the Association of South East Asian Nations, “ASEAN”, (of which Indonesia, Malaysia, the Philippines are major members) were responsible for the most gains, while demand held steady for imports from Korea and Japan, and Taiwan actually experiencing a decline in demand for its asian furniture exports. It is here to that we can clearly begin to see the reasons for this disparity.
More developed nations like Japan, Korea, and Taiwan experienced appreciation in their currencies which have brought with them attendant rises in labor costs. China remains an exception to this; while it is also a highly developed nation it has been careful to control the appreciation of its currency.
Japan, Taiwan, and Korea also lack large domestic supplies of the raw materials necessary for the manufacture of asian furniture, while China and ASEAN are again the exceptions. These resources include such materials as timber, metal (steel and aluminum), and organic fibers and fabrics. With China and ASEAN already accounting for 92% of all asian furniture imports in the United States by 2004, it is easy to see that the dual advantage of inexpensive labor and plentiful local supply of raw materials are keys to their success as compared with other exporters in the region.
In fact, the difference in cost of production between China and the ASEAN and its other regional competitors is so pronounced that Japan has actually become a major importer of Asian manufactured furniture. Moreover, Taiwan has had to entertain the idea of leaving the market of manufactured wooden asian furniture and is begining to produce asian furniture containing more metal.
It may be that the only risks to Chinese and ASEAN dominance as suppliers for the demand for Asian furniture in the United States may be the United States itself. In recent years the domestic producers of many manufactured goods in both Europe and the United States have reacted hostilely to competition from Asia in general and China in particular. Unable to compete, the domestic industries in these major import markets have formed powerful political lobbies with the aim of increasing import duties on a wide variety of Asian and Chinese goods.
There is however nothing to indicate this poses a long term challenge to Asian manufacturers as the data would indicate that even in this climate Asian manufacturers have experienced a steady increase in demand for their goods. In the example of the textile industry for instance, even after thirty years of special protections the US textile industry has yet to pose a challenge to Chinese manufacturers even with the exclusive status it enjoys with CITA and the Commerce Department. It is unreasonable to assume that any other industry would fare better, including asian furniture manufacturers.
In the context of global asian furniture trade, Asia also shows healthy signs of growth with respect to its other international competitors. Of all asian furniture imported into the United States in 2004, more than 50% was from Asia. This number was up from just under 40% four years earlier resulting from a roughly 90% increase in Asian furniture imports into the United States. Compare this to an increase in 34% from Mexico, 3% from Canada, and an increase of just 0.7% from the EU over the same period. Taken as a function of both volume and rate of increase, Asia is clearly the fastest growing exporter of asian furniture to the United States.
Summary Article by Greg Seigneur
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