Foreign Trade Enterprises Encounter Extremely Cold

For small and medium foreign trade Enterprises, raw material prices and labor costs rise, RMB appreciation and foreign countries. Trade Protectionism exacerbates these problems and may become a long-term trend. It is necessary for enterprises to "seek their own way".

The cold wave is very sharp. With this feeling, we can see that the current mood of Chinese foreign trade enterprises is quite appropriate: raw material prices and labor costs rise, RMB appreciation, insufficient external demand and intensified foreign trade protectionism. A large number of small and medium-sized enterprises relying on export trade enterprise Is suffering from the "second cold winter" since the financial crisis.

Professor Yin Xingmin, deputy director of the China Economic Research Center of Fudan University, told Xinmin weekly that the environment facing China's foreign trade enterprises may be worse than that during the financial crisis of 2008. These enterprises can tide over difficulties by finding new markets or changing their product structure, and e-commerce may help China's foreign trade enterprises survive this cold season.

　 There is frost on the snow.

Han Xiaodong, founder of Shanghai Xinyi Beijing Great Automotive Components Company Limited, who has been immersed in the foreign trade industry for many years, told Xinmin weekly that the competitiveness of small and medium-sized Chinese foreign trade enterprises in the advanced market is on the decline. His words were approved by many "made in China".

Mr. Kim is the head of the marketing department of a wood products manufacturing company in Jilin. The main product of the company is flooring. Over the past ten years, it has been engaged in overseas sales. Its customers are mainly in European and American countries. Its customers in Asia are South Korea and Japan. That is to say, the appreciation of the renminbi is equivalent to the price reduction of the products in disguised form. Since 2010, the exchange rate of RMB against the US dollar has been rising. The floor of export is still selling at the original price, and the profit of the company will be continuously compressed, and now it has come to the edge of cost price sale.

Most of the companies like Mr. Kim are afraid to pick up the bill now. Since the yuan was announced in June this year, the companies have to bear losses due to exchange rate changes. At present, the company can only watch its changes. Mr. Kim calculated for reporters. In January 8th this year, the exchange rate of RMB against the US dollar was 6.8279, compared with 6.6477 in December 6th. According to the exchange rate difference of 0.1802, the company will earn less than about 1800000 yuan per 10 million dollars in exports. Although Mr. Kim does not want to disclose the specific export volume of the company, but according to the export situation in the past years and the export growth in recent years, "good times, the monthly export volume may reach tens of millions of dollars", which means that Mr. Kim's company has lost at least several hundred million yuan this year.

In addition to the appreciation of the renminbi, rising costs are also a big problem for foreign trade enterprises, especially those who only earn processing fees. "In the past two or three months, the price of fabrics such as cowhide and sheepskin has increased by 30%. The direct result is that handbag factories have no profit." Huang Huang, the boss of a Guangdong foreign trade handbag factory, told reporters that the size of her handbag factory has shrunk in the past two years. Now there are only dozens of people left. Although the orders are adequate, the less money they earn, the less they earn.

Clothing companies also complain. Entering the September, cotton and cotton yarn almost one day a price, in just over a month, the increase has exceeded 60%. Driven by the price of cotton, the price of cotton and grey fabric materials has risen sharply. The boss of a Guangdong clothing company sighed: "I have been making clothes for thirty years, and I haven't seen cotton prices skyrocketing. Now the weekly price is one yuan a week higher than last week. The price of the whole garment has increased by four or five at least. The order is fixed in the early stage, and the customers refuse to raise the unit price. The more we do it, the more we lose."

The trend of revival of foreign trade protectionism in the post financial crisis era has also made Chinese enterprises suffering from "internal worries" worse.

According to China's accession to the WTO (WTO) agreement in 2001, WTO members have the right to decide whether to give China a full market economy status within 15 years after accession. In 2016, China will automatically get this status. {page_break}

So far, nearly 100 WTO members have acknowledged China's market economy status, but the most important economies, the United States, the European Union and Japan, still do not recognize it. Since the two quarter of this year, the economic recovery in the US and Japan has slowed down significantly due to the expiration or diminished effect of large-scale stimulus policies. Against this background, macroeconomic policies such as the US, Europe, Japan and other major economies tend to intensify their self-determination, and trade protectionism is heating up. In recent years, China's trade frictions have spread from low value-added industries such as textiles and light industries to new industries such as new energy, electronic information and other high technology and high added value industries. The trend of extending from the macro level of specific product level to industrial policy and exchange rate system is more obvious.

As the largest country to launch trade remedy investigations in China, the United States launched 24 trade remedy cases and related cases in China in the first half of October this year. Regarding this, Bai Ming, deputy director of the International Market Research Institute of the Ministry of Commerce and international trade and economic cooperation, believes that China's non market economy status has raised the protectionism of many countries. And the trend of trade protectionism in the future. Zhang Yansheng, director of the Foreign Economic Research Institute of the national development and Reform Commission, predicted: "next year there may be a trade war and a currency war against China." Yin Xingmin seems to be more pessimistic. He told the Xinmin weekly that trade protectionism is likely to become a norm, and our government is unable to do anything in this respect to improve the international environment of small and medium-sized foreign trade enterprises.

　 Asking for help is better than asking oneself.

Now, it seems that for small and medium-sized foreign trade enterprises, the price of raw materials and labor costs, the appreciation of the renminbi and the intensification of foreign trade protectionism may become a long-term trend, and it is necessary for enterprises to "find their own way out".

On the one hand, Yin Xingmin suggested that China's small and medium-sized foreign trade enterprises can open up more new markets.

Mr Kim's timber companies have begun to adjust their marketing strategies to reduce the share of overseas sales, while putting products into the domestic market. "Domestic is a big market, there are many opportunities, high-end products go very well, and the price has more advantages." Mr. Kim said. In fact, under the pressure of increasing RMB appreciation, export to domestic sales has become a new choice for a number of export-oriented enterprises to resolve the pressure of appreciation.

Of course, small and medium-sized foreign trade enterprises should also "integrate with the international market" in information acquisition. The foreign trade information industry originated in the United States in the nineteenth Century, and has a history of over 100 years abroad. The real development of the domestic foreign trade information industry started after the reform and opening up. At that time, the state put forward the slogan of stimulating domestic demand by foreign trade, and increased support for foreign trade. At the same time, many foreign trade companies were spawned. With the further opening of the Chinese market, a large number of enterprises were involved in the competition of the "global big market". The relative obstruction of information has caused many problems: where are the markets, where are the customers, how are the prices and how are the competitors? In the global competitive market, the international buyers are very familiar with the behavior of Chinese enterprises, but Chinese enterprises are unable to learn the relevant information of the international buyers and competitors, and the situation is extremely passive.

Yin Xingmin said that China's foreign trade development mode from the first generation of exhibitions, the second generation of B2B e-commerce to the third generation of search engine keywords are facing the problem of information asymmetry between the two sides, while the Dunhuang B2C, Yi Tang network, Lanting Pavilion gathering potential, Milan network, Sihai commercial boat, special information "foreign trade information treasure" and other foreign trade B2B or platform have solved this problem. "Unfortunately, there are many electronic and foreign trade information products in our country, which help foreign trade SMEs in the international market competition, but these products are not real-time online, and they may not be able to get the latest information needed by foreign trade enterprises for the first time."

On the other hand, small and medium-sized foreign trade enterprises must take the initiative to change the product mix. Zhao Zhongxiu, Dean of the school of international trade of the University of foreign trade and economics, believes that if the proportion of China's processing trade in foreign trade can be reduced from the current 50% to the level of slightly higher than 40% during the "12th Five-Year" period, it will help to optimize the position of Chinese enterprises in the global production network. He said that the volume and scale of China's foreign trade developed rapidly, and the quality and efficiency of the products increased slowly. A large number of manufactured goods exports were low in technology, and products with independent intellectual property rights and independent brands were few. Moreover, with the rapid development of China's foreign trade, the constraints of resources, environment, labor force, land and other factors become more and more prominent. Although the cold wind is strong, foreign trade enterprises should increase R & D efforts, innovate their own brands, and strive to accomplish the transformation from "made in China" to "created in China".