(chinadaily.com.cn)
Updated: 2007-07-18 14:36

Although retail giant Wal-Mart made no comments on a report that it had cut US$6 billion worth of purchase orders in China, several Chinese suppliers reported receiving fewer orders from the company this year, the National Business Daily said on Wednesday.

A manager with the Boshan Linaer Garments Co in Shandong Province complained that Wal-Mart, their biggest client, began cutting autumn orders as early as last year. Now they have also cut spring orders for next year.

According to him, the reason could be slow sales or simply a shift to other countries due to the appreciating renminbi.

Other companies such as Weifang Zuo Bang Garment Co and Langsha Sock Industry Co have also been hurt by Wal-Mart order cancellations. "We are working hard to explore new clients," said the manager of a T-shirt factory that had supplied Wal-Mart for several years.

In the past years, China has become an important source of cheap products for Wal-Mart. The retail behemoth has purchased nearly a thousand products types in China each year, ranging from dresses, shoes, electronic devices and toys to daily necessities. Last year US$18 billion worth of Chinese products were procured by Wal-Mart, almost one tenth of the country's total export value to the United States.

According to Wu Jianguo, a specialist in business research at the Shanghai Business School, Wal-Mart will not eliminate China from its list of global purchase bases as long as China remains a global processing powerhouse and the company's sales keep growing.

However, for Chinese suppliers, reliance on Wal-Mart should be considered risky. Instead they should upgrade their products constantly and promote domestic sales to diversify their client base, said Wu.