The International Herald Tribune is reporting that many export industries in China are reporting lower profits as the world-wide financial crisis have decreased demands for various goods produced in China. Demands for Chinese goods have decreased recently especially from the United States, so some Chinese industries have concentrated in marketing their products in other areas, such as Europe. However, the extent of the financial crisis has been global, and overall the real growth of Chinese industries has actually been negative recently.

On top of the financial crisis is the issue of tainted products produced in China. Especially for the toy industry, many Chinese factories are being hurt by the strict product quality regulations imposed by several Western countries. Some Chinese companies have initiated the reduction of operating cost by outsourcing labor to other countries to offset profit loss. But strict quality standards have shut some companies from exporting to developed markets in the west, which has slowed down growth in China.

Although it is expected that China will be facing some type of economic slowdown from the global financial crisis, the amount of foreign currency reserves in the central bank of China will probably cushion China from any upcoming financial turbulence. It seems that years of trade surplus have actually given China an edge in weathering the financial storm.