China's furniture hub Foshan faces deepening economic crisis

· UPI

May 11 (Asia Today) -- The southern Chinese city of Foshan, long known as one of the country's most important furniture manufacturing hubs, is facing mounting economic distress as factory closures, shrinking exports and China's prolonged real estate slump weigh heavily on the local economy.

Industry reports and Chinese media outlets including Economic Daily said Foshan's furniture industry accounts for an estimated 35% of China's total furniture production.

The sector, valued at roughly 700 billion yuan ($97 billion), represents about half of the city's gross regional domestic product, with approximately 30,000 related companies operating in the region.

But the once-booming industry is now struggling through what local observers describe as its worst crisis in decades.

Related

According to reports, an estimated 300 furniture companies in Foshan collapsed in 2025, roughly double the number recorded the previous year.

Economic growth in Foshan has also slowed sharply. The city's GRDP growth rate fell to 1.3% and 0.2% over the past two years, compared with 6.3% and 5% in 2022 and 2023.

Analysts say the downturn reflects multiple overlapping pressures, including U.S. tariffs, aggressive price competition and China's weak housing market.

The report said U.S. tariff barriers exceeding 30% severely damaged Foshan's furniture exports, which had previously reached about $10 billion annually.

At the same time, so-called "neijuan," a Chinese term referring to destructive internal competition and price-cutting wars, has spread across the industry.

High-end double beds that would normally sell for between 20,000 yuan ($2,770) and 30,000 yuan ($4,160) are now reportedly being sold for only a few thousand yuan, sometimes below production cost.

China's prolonged property market downturn has further weakened demand for furniture purchases tied to home moves and new apartment sales.

Rising labor costs and increasingly cautious consumer spending patterns in China have added additional strain on manufacturers.

Local media said many residents in Foshan have begun lamenting the decline of what was once considered one of the city's most successful industries.

-- Reported by Asia Today; translated by UPI

© Asia Today. Unauthorized reproduction or redistribution prohibited.

Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260511010002418