Trade War on Dinosaur Business: Chinese replica manufacturer acts to mitigate impact
Updated 14:04, 30-Oct-2018
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More than 80 percent of the world's dinosaur replicas are made in the Chinese city of Zigong. Nestled in China's Sichuan province, Zigong is known for its discovery of dinosaur fossils, dating back to the Jurassic era. But, tariffs stemming from the China-US trade spat may turn back the clock on this industry too. Our reporter Wei Lynn Tang digs out this story.  
You don't get much closer to the real thing than this. Animatronic dinosaurs, lifesize replicas of the prehistoric titans themselves, are a sight to see in Zigong City. The Sichuan province city accounts for over 80 percent of the global market share of these replicas. Given its share of pie, Gengu Dinosaurs now finds itself in the crosshairs of a trade war. A 10 percent tariff imposed by the United States was already in tow since last month. Come January 2019, American customers of Gengu are set to pay 25 percent.
GUO QIHONG, CHIEF EXECUTIVE OFFICER GENGU DINOSAURS CO., LTD "We have been exporting our products to the US for over 10 years. Previously, it was almost zero in tax. Now our customers may consider other entertainment options. The US is, after all, an international hub, if people see less of us there, our exposure will fall and we may get less of other market's businesses as well."
WEI LYNN TANG ZIGONG, SICHUAN PROVINCE "These dinosaur replicas are made of silicon on the outside, and steel on the inside. All sourced locally. But that doesn't mean it is insulated from the ongoing China-US trade war. Exports to the United States account for about 10 percent of the company's overall sales."
Still a considerable portion, Guo says, comparable to what Gengu sells to its other 60 export markets. In 2017, the company's exports amounted to 5 million US dollars.
Already, it is restrategizing. Gengu seeks to gradually move up the value chain, now targeting the premium market. This comes as demand from science museums worldwide remains untapped.
GUO QIHONG, CHIEF EXECUTIVE OFFICER GENGU DINOSAURS CO., LTD "We will improve the quality of our products, to make it more interactive; so that when customers spend a little more, they will still feel it's okay. Secondly, where previously we only sold products to our customers, we now also plan to invest and participate in overseas exhibitions on our own. Thirdly, we will beef up our domestic markets."
Zigong's rich history in fossil discovery largely fuels the skill and passion of its workers. The city is said to house over 40 dinosaur replica companies.
From steel welding to form the frame of the dinosaur to sculpting and creating the dinosaur's skin texture. This is a place Gengu Dinosaur's 200-strong employees call "home".
GAN JUFANG, FACTORY HEAD GENGU DINOSAURS CO., LTD "I have worked here for 8 years. With the US tariffs, employees are concerned that foreigners will no longer buy our products. If and when production volume falls, we wonder if will we be laid-off or see our salaries cut."
But Gan is confident about the industry, citing China's consumption upgrades as well as continued demand from foreigners. And from a buyer's perspective.
PAULO SWERTS, PURCHASE DIRECTOR T-REX PARK, CAMPINAS CITY BRAZIL "Every kid likes dinosaurs; it's a good business if you know how to do it well."
The trade war initiated by the United States has prompted companies to re-think strategies. For Guo, he is not deterred by what he calls this temporary setback. If anything, he is even more determined to work harder and to do better. For him, making dinosaur replicas is more than just a job, it is a hope and gateway, to continue putting his hometown on the world map. WLT, CGTN, Zigong in Sichuan province.