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May 23, 2011

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This was a MAJOR issue five years back when the anti-dumping lawsuits were first filed, and certainly led to many of the large furniture manufacturers to set up shop in Vietnam. The major Chinese manufacturers (mostly Taiwanese, by the way) hired top-notch lawyers to dispute the dumping claims, I like it very much, thank you

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Scott - I forwarded this to a friend who was an ex-pat in China for 7 years as an executive in the industry in question. He sent back a response I thought was worth sharing in full (scrubbed of any identifiers):

This was a MAJOR issue five years back when the anti-dumping lawsuits were first filed, and certainly led to many of the large furniture manufacturers to set up shop in Vietnam. The major Chinese manufacturers (mostly Taiwanese, by the way) hired top-notch lawyers to dispute the dumping claims, and most were only tagged with modest single-digit tariffs. The small and medium players got hit with massive tariffs – some initially proposed tariffs were in excess of 50%.

When the Chinese manufacturers moved to Vietnam, they did so with only select furniture groups. Typically, the factories in Vietnam focus on bedroom furniture, while the Chinese factories focus on everything else. As the domestic market for wood furniture in China grows, we are seeing some manufacturers move other furniture groups to Vietnam to free up capacity, but it is very slow.

Vietnam clearly benefited the most of the SE Asian countries, but we’ve also seen a significant move into Indonesia. Logically, given its forests, Indonesia is the preferred choice over Vietnam. But its relative instability and lagging infrastructure has held back the development of the industry.

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