Chinese companies aren't winning overseas just because they're cheaper, Goldman Sachs says
Source: Business Insider ·
China's weak domestic demand and years of deflationary pressure have fueled concerns that its exporters could push down prices overseas.
From the source
Chinese consumer technology is increasingly challenging the perception that the country's exporters compete only on price.Luo Yunfei/China News Service/VCG/Getty ImagesThe biggest myth about China's export boom may be wrong, according to Goldman Sachs.Chinese products often start cheap but become more expensive as they improve.Price wars often begin with rivals fighting to win back customers.Chinese companies aren't winning overseas just because they're cheaper, according to Goldman Sachs, challenging one of the biggest assumptions behind China's export boom."Intuitively, I think we would all associate with the Chinese product, with price deflation, price cuts," Trina Chen, co-head of Greater China equity research at Goldman Sachs, said on the bank's "Exchanges" podcast published Tuesday.But Goldman found Chinese products often become more expensive after entering foreign markets, partly as their quality improves, while price cuts tend to come later as established rivals fight to…
BestAIBroker analysis
- Finance-aware sentiment: slightly negative (-0.30 on a -1 to +1 scale).
- Event classification: OTHER.
- Market importance score: 30/100, weighting entity relevance, source credibility, multi-outlet coverage and recency.
- Symbols referenced: GS.