Amid global supply chains wobbling as raw material prices and logistics costs surge due to the Iran war, a report said orders for Chinese small home appliances are increasing in Europe and the United States. However, this appears to be more of an advance purchase brought forward over concerns about future expense increases than an actual expansion of demand. Foreign media noted that, unlike the short-term rise in demand, overall export conditions are deteriorating.
According to China Business News on the 24th, U.S. and European buyers have recently been discussing with Chinese manufacturers plans to increase orders for Chinese small home appliances such as fans by around 10%. It appears to reflect concerns that production expenses could rise further next year if the war drags on. However, Chinese companies say price hikes of more than 20% are needed due to rising raw material prices, and negotiations over pricing are reportedly continuing.
China Business News said, "As of March, prices of key raw materials such as plastics, copper, and steel rose 20% to 30% from the previous month, pushing up Chinese manufacturers' production costs by more than 20%," adding, "On top of that, rising crude prices are further increasing overall production expense pressures."
Amid this, some say China's relative competitiveness is again coming to the fore in terms of supply chain stability. Southeast Asian companies are relatively more vulnerable to supply chain uncertainty, boosting demand for Chinese suppliers. Li Mingyang, head of the home appliance maker LeTu Electric, said, "Southeast Asia's crude reserves are estimated to be less than 30 days. By contrast, China's supply chain is relatively stable," adding, "Lead times are also longer than in China, and some parts still have to be sourced from China, so some orders could shift to China in the medium to long term."
However, it is uncertain whether this trend will continue in the medium to long term. Excluding the increase in advance-purchase demand, most of the major expense structures surrounding exports—such as logistics costs, insurance premiums, and raw material procurement—are deteriorating.
According to Bloomberg, as of March, container freight rates to the Persian Gulf rose 35%, and insurance premiums surged 143%. On top of that, companies must shoulder a war surcharge of up to $4,000 (about 6 million won) per container. Manufacturers also expressed concern about procuring raw materials such as copper and aluminum. According to the report, if raw material prices rise 10%, the gross profit margins of Chinese appliance makers such as Media, Haier Smart Home Co., Ltd., and Gree will fall by up to 6 percentage points.
In fact, signs of weakening Chinese demand are being detected, especially in Middle Eastern countries. China's exports to the Middle East doubled over the past five years, surpassing $120 billion (about 180 trillion won) in 2025. In January–February this year, exports to the United Arab Emirates (UAE) and Saudi Arabia rose 23%. But as the Iran war entered its second month, orders from Middle Eastern buyers have reportedly been drying up. Bloomberg said, "Take air conditioners as an example: last year, China exported more than 17 million units to the Middle East, accounting for 20% of total exports," adding, "However, overseas sales in March are expected to fall 12% year over year."
If global demand for China weakens and exports take a hit, it could lead to a chain of side effects such as deepening overproduction, intensified price competition, and reduced corporate profits, weighing on the broader Chinese economy.
Bloomberg said, "China was able to expand exports over the past two years thanks to strong global demand, which has supported the economy despite higher U.S. tariffs. That allowed the Chinese government some policy leeway not to push aggressive stimulus," adding, "But if a global downturn caused by the war takes hold, that policy leeway will disappear."