Opening furniture containers from the US to China, you will find words “Made in USA” labeled on Markor, La-Z-Boy, Thomasville and Ashley, but in which sense the furniture is made in the US, and to what extent it is made in China or Asia, since there are more and more frequent industry transfers and consolidations among different countries in the world furniture industry with the development of international furniture trade?

 

At present, furniture made in China is exported to the US and Europe in large amounts, part of which, however, is re-exported to China as “imported furniture”. As is well known, it is hardly to guarantee that every component of the “imported furniture” is manufactured abroad even it is “100% imported”. Actually the transfer of the world furniture manufacturing center to China has started from the 1980s or 1990s. Now some pioneering furniture manufacturers from around the world—Singapore HTL Furniture, Italy DeCoro and Natuzzi, and US Universal Furniture—have led the way in this kind of transfer by setting up manufacturing facilities in China, whose furniture exports from China have all reached hundreds of millions of dollars per year. On the other hand, some China private furniture manufacturers are trying to catch up with those Europe and US funded famous enterprises.

 

China’s furniture industry has been facing two large markets: the domestic and the international. From 1985 to 2005, the annual growth rate of China’s furniture output averaged 15% plus and in 2006, the exports of furniture from China reached USD17.4b, ranking first in the world.

 

The rapid development of China’s furniture industry depends on a low-price labor force consisting of five million skilled workers. Though the cost of labor in Indonesia, Vietnam, and Pakistan is far lower than in China, the competency and work efficiency of workers in these places lag much behind China on the whole. As capital is apt to flow to places with high quality and efficiency and low costs, China naturally draws the furniture capital from all around the world.

 

There are different responses to this furniture industry transfer to Asia, especially to China, some positive and some passive.

 

Europe responds passively. European furniture manufacturers are mainly composed of medium and small companies who lack strategic perspicacity at a global level and the capacity of coping actively and efficiently. As is generally known, European furniture has enjoyed a reputation around the world thanks to the prominent design; Italy has succeeded in maintaining a top position in the world in furniture exports for several consecutive years. But with the evolvement of globalization, if Europe furniture industry sticks to its stereotypes, it will see a shrinking market and be put in a more and more passive position in the process of the world furniture industry transfer.

 

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(Selected from: China Wood Monthly Market Report Jan 2007. To learn more about it, pls contact Rain at nl@chinawood.org for China Wood Monthly Market Report.)