CHINA Air pollution ignites decline in firework exports, impacting local businesses


Air pollution ignites decline in firework exports, impacting local businesses

Global Times

02:37, February 14, 2018

Consumers buy fireworks in Qingdao, East China's Shandong Province on Monday. Photo: VCG

China is the world's largest producer, consumer and exporter of fireworks and firecrackers. But the whole domestic industry has been struggling prior to the Spring Festival holidays - a traditional sales peak period - after local regulators imposed a ban on the selling, transportation and lighting of such explosives. The Global Times recently spoke with several factory owners to discuss how the ban has potentially affected their domestic sales and export volumes. 

The upcoming Spring Festival may after all not bring much happiness to the country's firework and firecracker producers and traders compared to previous years. 

One of those manufacturers is Su Yun, the 40-something owner of Shenhong Firework and Crackers Group based in East China's Anhui Province.

This year, Su saw his company's sales of firecrackers in the domestic market plunge by more than 20 percent prior to the Chinese lunar new year holidays, a traditional sales pillar for the industry as Chinese people tend to light fireworks and firecrackers to drive out evil spirits and wish for good luck during the most important and most significant annual celebration. 

According to Su, he has had to lay off workers by 15 percent to make up for the "unexpected" revenue shrink.

"The sales decline comes after China last year carried out a strict firework and firecracker ban across the country as a result of environmental and safety concerns. And we [firework and firecracker factories] are struggling to survive under that ban," Su told the Global Times over the weekend.

The ban is part of the Chinese government's largest-ever campaign against air pollution, which began in 2017. 

Environmental protection was listed as one of the government's top priorities for the next several years in the report to the 19th National Congress of the Communist Party of China held in October 2017.

So far, around 444 cities - not only first-tier cities but also second- and third-tier cities such as Hangzhou, capital of East China's Zhejiang Province and Tangsha, North China's Hebei Province - have banned or limited the sales, transportation and lighting of fireworks. 

'Industry withering' 

Wu Zhengli, secretary-general of the China Fireworks and Firecrackers Association (CFFA), told the Global Times on Monday that the ban is "hitting" the whole industry, which used to generate more than 60 billion yuan ($9.48 billion) in annual output value every year. 

Sharing Su's struggle, the sales manager of a firecracker factory in Liuyang county, Central China's Hunan Province, also sounded hopeless during a telephone interview with the Global Times on Sunday. 

"So far, our sales ahead of the Spring Festival have plummeted by almost 10 percent as demand subdued, and that number is expected to increase further during the first 15 days of the first month of the lunar new year, known as the holiday period," said the sales manager, who gave only his surname as Wang.

Liuyang county, along with the counties of Wanzai and Pingxiang, both in East China's Jiangxi Province, are the major production regions for the nation's fireworks and firecrackers.

Because of the decline in firecracker and firework market sales, Wang complained that his dealers are delaying payments of goods, resulting in a bitter capital shortage for the company. 

Wang said that such issue has become quite common in Liuyang's firecracker and firework factories, with dozens of small and medium-sized ones already claiming bankruptcy, while another 300 family businesses have been shut down by the local government due to failing to comply with safety operation standards. 

"The whole industry, which the government stimulated a decade ago, is withering," Wang sighed. 

As of 2013, China was the home to about 4,500 firework manufacturers, but that number dropped to 2,800 in 2017, said data from the CFFA.  

But what worries Wang more than anything is the slide in exports, caused by his company failing to complete overseas orders several times after the local government frequently imposed orders to halt production. 

"Traditionally, we suspend production from July to September because the weather conditions then are not suitable, but such period has extended by more than one month this year… some reasons are important national meetings, but most of the time we just followed abrupt orders without being given a reason or prior notification," Wang complained. 

In Wanzai, the period when factories are ordered to suspend production is longer than that in Liuyang, said a manager at Wanzai-based Jinfeng Firework Co, which specializes in exporting. 

The manager, who only gave her surname as Chen, told the Global Times over the weekend that the halting period of local production has grown three to four months longer than the previous years.

"Although demand in foreign markets is stable, we have often been asked to halt manufacturing and therefore cannot catch up with the orders… Our overseas shipments have been reduced by 1,000 containers so far," she noted. 

In 2017 alone, Jinfeng exported fireworks and firecrackers worthy of $700 million, with its major overseas markets being the US and Southeastern Asian countries, according to Chen. 

China is the world's largest firework and firecracker exporting country, with products being sold to 160 countries and regions globally. 

But at the same time, it is also facing increasing competition from Southeast Asian countries, Mexico, India, Spain and Japan, industry insiders pointed out. 

"If exportations continue to decline, the overseas market gap may be filled up by our rivals in those nations," Wang said.

Besides export concerns, the domestic firework and firecracker industry has been feeding the small county where Chen's company is located. 

In Wanzai, where about 70 percent of locals are involved in firework and firecracker production and selling, incomes in the business sector have contributed 25 percent to the local economy, she said.  

"Monthly incomes for locals average between 3,000 and 4,000 yuan, and 40 percent of the workers here drive to factories… If the industry dies, how could the locals find an alternative to make a living?" Chen asked.

Accident prevention

Wu said that the nationwide ban also aims to prevent accidents and fatalities in manufacturing plants. 

Earlier in February, an explosion occurred at a firework plant in Pingxiang, causing one death and three injuries, the Xinhua News Agency reported. 

And in 2016 alone, a total of 43,062 people died as a result of factory accidents, according to data provided by the CFFA. 

As such, the secretary-general of the CFFA as well as some of the country's manufacturers have said that "it is reasonable" to close down small factories which are operating illegally and dangerously.  

"Small and medium-sized companies are weak in terms of equipment and technology, and forcing them out of the market to establish competition among big companies is a boon for the whole industry, allowing major players to explore industry automation and intelligence trends that will improve efficiency as well as reduce costs and production accidents," Wu said.

But others have questioned the so-called one-size-fit-all approach, criticizing the measure as being too harsh. 

"Industry upgrading is a good thing, but a nationwide ban is a sign of local regulators' lazy governance," Su said. 

In fact, low-quality products are the ones that should be blamed for causing air pollution, Su added. 

"Manufacturing procedures requiring special skills, which guarantee high degree drying, as well as carefully chosen raw materials and innovative formulas, can actually yield less pollution that is almost negotiable," Su pointed out.

Wang agreed. He said that compared with the pollution generated by vehicles, the lighting of fireworks and firecrackers is just "a drop in the bucket."

In addition, manufacturers have expressed concerns about the loss of Chinese traditions and heritages as the ban takes effect.

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