Chinese exporters exhibiting at China’s biggest trade fair said the weak global economy was hurting their business, prompting many to freeze investment and some to cut labor costs in response.

The pessimistic mood at the Canton Fair in the southern city of Guangzhou suggests that a surprise rise in China’s exports in March may have reflected exporters’ resumption of orders held up last year by Covid-related restrictions rather than renewed economic strength. , Reuters notes, citing Reuters. News.ro.

The first major trade event since China abruptly lifted Covid-related restrictions and reopened its borders came as significantly higher borrowing costs in the United States and Europe hit demand for Chinese-made goods.

Chris Lin, a spokesman for Christmas lamp maker Taizhou Hangjie Lamps, said orders were down 30 percent this year from last year.

“Difficulties last year were due to disruptions in logistics and production, but the local authorities helped to solve the problems. This is an internal problem. Now we have external problems. We can’t solve them,” Lin said.

“This year will be the hardest for us,” he added, as rising electricity costs caused by the war in Ukraine further reduce demand for his jewelry.

Lin said his company could not afford to sell at lower prices, but could try to cut labor costs.

The firm relies on contract workers, who are fired in September and October after the delivery of Christmas orders.

“If there are weak orders this year, I will let my workers go early,” he said.

“The whole world economy is bad right now, and the fair won’t change that”

Huang Qinqin, director of sales at Zhong Shan Shi Limaton Electronics, an exhaust fan maker, has similar views on cutting costs after orders halved in the first quarter.

“In our factory, workers come to work when there are orders,” Huang said.

That usually meant working overtime even on weekends, but this year more workers are taking days off, she said.

A razor maker in the eastern city of Ningbo, who asked not to be named to reveal future plans, said the firm had already laid off workers and would cut prices in the coming months if orders did not improve.

The worsening outlook for industrial workers will cause concern among policymakers, who are aiming for 12 million new jobs in China this year, compared with last year’s target of 11 million.

Dozens of Chinese suppliers told Reuters they did not plan to spend much to upgrade production lines this year, given weak demand.

“We don’t plan to increase investment,” said Luna Hou, a sales representative for Topgrill, which makes street grills and has cut prices by 5 percent to attract customers.

Vicky Chen, foreign trade director of outlet manufacturer Qinjia Electric, said he does not expect a significant increase in sales at the fair, which runs until May 5.

“The whole world economy is bad right now, and the fair won’t change that,” Chen said.