Since the beginning of this year, China’s two major foreign trade hubs, the Pearl River Delta and the Yangtze River Delta, have been affected by the epidemic, but the foreign trade industry has still shown strong resilience. At the same time, there are ongoing discussions about shifting some orders to Southeast Asian countries. What cannot be ignored is that the current situation faced by foreign trade is complex and changeable. Some foreign trade companies are experiencing declining orders, rising costs, and declining profits.
According to calculations by Yunqi Capital, Europe, the United States, Japan and South Korea transfer a total of approximately US$72 billion worth of orders from China in the four major categories of shoes and clothing, furniture, electrical appliances, and communications a year, accounting for approximately the total exports of the corresponding categories to Europe, the United States, Japan, and South Korea. 16.3%. Vietnam, Malaysia, Thailand, Indonesia and the Philippines have taken orders of about US$53 billion, of which Vietnam has taken orders of about US$45 billion.
Some textile and garment companies encounter “order difficulties”
Although my country’s foreign trade exports have achieved good results this year, due to the impact of the epidemic and geopolitical conflicts, the global economic recovery is fragile, international market demand is shrinking, and the global industrial chain and supply chain system has been adjusted, resulting in localization, regionalization, Some foreign trade companies are hardly optimistic about the trend of nearshoring.
Xu Haitao told reporters that due to the impact of the epidemic in Shanghai this year, the company has lost a lot of foreign dealer customers. “It is difficult to bring back the lost customers. Some of the company’s core customers have placed some orders to competitors. Shanghai does not have a cost advantage. But with quality or service advantages, once a customer accepts a competitor’s products and services, it’s very difficult for us to win back.”
Xu Haitao said that the company’s electromechanical equipment field mainly targets second-tier European and American brands. In addition to domestic companies, competitors mainly come from Europe, the United States, Turkey and India. Electromechanical equipment requires after-sales service. The epidemic has prevented the company from sending personnel for on-site after-sales service. “For example, it originally cost only 1 million yuan to buy Chinese equipment, and 5 million yuan to buy European and American equipment. However, due to the epidemic, Chinese companies are unable to provide on-site after-sales service. Some high-end customers will turn to European and American equipment, and customers with lower budgets will turn to Indian and Turkish equipment. ”
He revealed that the original target for this year was a 50% growth rate, but it gradually picked up at the end of June, which is equivalent to removing a quarter. Currently, we can only lower the target and strive to be the same as last year. If done well, the growth rate can reach 20%. , which is equivalent to lowering the growth rate by at least 30%.
Similarly, the person in charge of a company engaged in machinery export in the Pearl River Delta also told reporters that since the first half of this year, business volume has dropped by 30%. One reason is the drop in demand, and the other reason is that it is inconvenient to go out to contact customers. “Equipments like ours have , I need to show people. I used to frequently participate in domestic and foreign exhibitions, but now I have been unable to show face-to-face with foreign customers for almost three years, which is not conducive to selling new products and developing new customers.”
Liu Xiaoming said frankly that since the rise in commodity prices last year, the cost of raw materials in the entire industry is still at a high level. Some companies in the same industry have been operating at zero profit due to factors such as high production costs, no brand, no core technology, and lack of sales channels. In addition, shipping costs for both long-distance and near-ocean shipping have remained high, making the company’s originally advantageous FOB price lose its competitiveness and causing some orders to flow to countries such as Malaysia and Turkey.
“The trade situation is still grim. One-third of the traders who helped the company export as agents have closed down, and many of those who persisted have laid off half of their employees,” Xu Haitao said.
In addition, many foreign trade companies have been affected by Amazon store closures and other incidents in the past two years. The relevant person in charge of Hua Sixu said that the company conducted an 18-month 337 investigation with the American NOCO company, and finally under the guidance of the Intellectual Property Protection Center , achieved victory in the preliminary ruling, and can expand into the global market with more confidence in the future. However, many companies without intellectual property protection may face greater difficulties.
However, while accepting orders, Southeast Asian countries have also expanded their imports of raw materials and spare parts from China. China’s supply chain advantages are still obvious. China’s status as a major manufacturing country will not be replaced by Vietnam, India, etc., but it is necessary to resume normal management of international exchanges as soon as possible.
Going overseas to grab orders
20 textile companies from Haining charter flights to Japan to expand market
“Go overseas to grab orders, and we’ll guarantee your return!” Recently, Haining City, Zhejiang Province, proposed five major measures to establish a 24-hour combat liaison group, led by the secretary and mayor, to provide unified command and coordination to solve the worries of enterprises going overseas and encourage enterprises to “be able to go overseas.” “Do your best, grab everything you can” to ensure that enterprises can go abroad smoothly and return home without worries. For enterprises with foreign trade business, Haining City Finance will provide 50% of the air ticket expenses incurred to participate in exhibitions or visit customers abroad, and a single enterprise can enjoy up to 50 Ten thousand yuan.
On September 13, the first charter flight overseas order grabbing group from Haining City, Jiaxing City, Zhejiang Province, composed of 20 textile companies and nearly 40 foreign trade professionals, took off from Hangzhou Xiaoshan Airport and headed to Japan to participate in the 3-day Japan Osaka International Living Products Exhibition. And the 15th Zhejiang Export Commodity Exhibition (Osaka) trade fair.
“This time we brought more than 300 new products, all developed using new materials, new processes, and new formats.” Lu Zhongjie, chairman of Haining Disai Knitting Co., Ltd., said that the company is mainly engaged in the production and sales of fashion socks, focusing on Japan. market, annual sales in the Japanese market are around US$4.5 million. Lu Zhongjie said frankly that due to the epidemic in the past two years, the company has not gone overseas to meet with customers for three years, and can only communicate through emails, phone calls, etc., which has had a considerable impact on the development of the company. “If we don’t see each other for a long time, the relationship will fade away. Especially this year, orders have begun to decline by about 20%. I have long wanted to go out to visit customers to grab orders.”
Every company cherishes this rare opportunity to go overseas and has made adequate preparations in advance. In recent years, in order to help Haining’s foreign trade companies effectively carry out international exchanges, Haining City has launched a special campaign of “Going overseas to grab orders and guarantee your return” , to solve the worries of enterprises “going out but not coming back”, chartered flights are an important measure in the special action.
Restore normalized management of domestic and foreign exchanges as soon as possible
is the biggest priority
Xiang Songzuo, a well-known economist and director of the Guangdong-Hong Kong-Macao Greater Bay Area Financial Research Institute, said that restoring normalized management of domestic and foreign exchanges as soon as possible is the biggest priority. “If the country is basically closed for longer, it will be extremely detrimental to our country’s exports and economic development, because overseas has been basically liberalized, and now many overseas orders are turning to Southeast Asia and other regions. If this trend cannot end as soon as possible, , which will cause a very big blow to China’s economy and exports.”
</p
