Regarding the effects of the corona virus on the German-Chinese furniture trade, Jan Kurth, Managing Director of the Association of the German Furniture Industry (VDM), explains: “German furniture exports to China already showed clear signs of slowing down last year. In 2019, exports to the Middle Kingdom fell by 16.5 percent to 281 million euros. However, this decline was due less to the coronavirus than to the slowdown in economic growth in China and the introduction of higher furniture import duties in the USA. The oversupply of furniture from Chinese production had a negative impact on demand for German and European furniture in China, but at the same time stimulated Chinese furniture exports to Europe. Accordingly, German furniture imports from China increased last year by 12.9 percent to 2.15 billion euros. The German foreign trade deficit in furniture trade with China thus rose to 1.87 billion euros.

Even though no official foreign trade figures are currently available for the current year, we expect a significant decline in the volume of German furniture exports to China in the first quarter of 2020, given the already visible negative effects of the corona virus on demand for furniture in China and on global supply chains. This is likely to affect not only German furniture exports but also imports of furniture, primary products and vendor parts. At the end of February the VDM conducted a member survey on the effects of the corona crisis on the German furniture industry. According to the initial results available, almost half of the companies surveyed (49%) are currently unable to deliver the goods they have already ordered to China. More than half of the respondents (58%) currently note a decline in incoming orders from China. On the import side, more than half of the companies (56%) state that they are affected by supply bottlenecks from China.

The current situation should therefore lead to a significant – at least temporary – decline in German furniture exports to China as well as a change in imports. If the slow start to furniture production in China means that German retailers are unable to purchase special offers, or at least delivery is significantly delayed, then large-scale and discount stores in particular will have to find other sources of supply. Whether this happens in Germany because of the pricing of the goods concerned, or whether it is spread over other European or international countries of origin, will certainly also depend on the reaction speed and delivery reliability of the alternative suppliers. One thing is certain: the year 2020 will again be a particularly challenging one for the furniture industry”.