Export Textile Enterprises Beware Of "Old Lai" In Europe And America

In November 18th, Mr. Chen was the owner of a home textile company in Haining, Zhejiang. Since May this year, he has been beset by $about 5000000 owed by a US client.

Now, although the date of collection is over, American customers still can't find anyone.

In fact, in May of this year, the goods had just been sent out for half a month, and Mr. Chen had found that the customers were abnormal.

"To call them many times, not to get stuck or nobody answered, I had a hunch at that time, but I was not sure, and I didn't want to believe that the worst thing would happen in my company."

Mr. Chen obviously had no choice but to face the cash order he could not get back.

Mr. Zhang, who has been engaged in women's clothing business in Changshu garment city for more than 10 years, has also suffered from debts this year.

In the first half of 2008, Mr. Zhang's debts owed him $5. 6 million.

"The market is hard to make and money is hard to catch up," Mr. Zhang told reporters.

In order to reduce losses, since the second half of this year, Mr. Zhang has to choose to abandon foreign orders and concentrate on the domestic market.

With the risk of global financial market affecting the real economy, the main export market environment of China's textile and clothing has changed, making the risk of overseas market of export enterprises increasing sharply.

Since the beginning of this year, the proportion of bad debts of foreign importers has increased significantly, for example, the bad debt rate of China's exports to the United States has increased 2-3 times this year.

According to China Export and Credit Insurance Corp's business statistics, the bad debt rate in normal years is about 1%, and the bad debt rate has reached 3.3% during the same period this year.

SMEs suffer deeply

At present, more than 80% of the export of Chinese enterprises is accounted for by foreign accounts. The payment period of buyers in European and American countries is generally 90 days after delivery, some 120 to 150 days, and even in Latin America for 360 days, which has posed a hidden danger to bad debts.

The above two enterprises are small and medium-sized textile and garment enterprises.

The industry believes that for such small and medium-sized textile and garment enterprises, it is impossible to spend more money, energy and time to recover money, loss can only be self unlucky.

The actual situation is that small and medium-sized enterprises account for more than 80% of the textile and garment enterprises. On the issue of bad debts, small and medium-sized private enterprises are a relatively weak group. They often do not possess the ability to prevent and control international trade risks. Compared with large enterprises, they have poor ability to resist risks.

The survey results from authoritative organizations show that most foreign trade enterprises are disturbed by overseas credit risks, while some foreign trade enterprises adopt a very cautious credit policy because they are afraid of bad debts, and do not do any non credit businesses, which limits the development of business.

The survey found that under the influence of widespread cold in the global economy, some small and medium-sized enterprises have a gambling mentality for overseas orders. They think that "if they take a single bill, they may make money".

In this gambling game, there are few winners.

What's more, when the reporters interviewed individual debt enterprises, they all took an evasive attitude, refused to answer reporters' questions, and worried that the exposure of bad debts would have adverse effects on enterprises.

Unlike small and medium-sized enterprises, large enterprises will issue customers' "letters of credit" to banks when they receive orders, so that even if the enterprises can not repay, they will still have banks as the last guarantee institutions.

Liu Xianbin, chairman of Shandong gold Weaving Co., Ltd., told reporters that although the company's exports were only a small part, they would be very cautious when they took orders. They would consult with relevant domestic institutions, such as banks, and search for credit ratings of foreign enterprises. They would only take orders when ensuring safety, and pactions usually take cash pactions or first payment and re delivery.

The insurance rate is too low.

It is understood that in foreign trade exports, China's foreign trade enterprises mainly rely on insurance credit insurance to guard against trade risks.

However, there are still many disadvantages in China's credit risk system, especially small and medium-sized enterprises.

Because of the information asymmetry and imperfection, export enterprises are facing serious credit risks, national political risks and exchange rate risks.

Chen Guoqiang, deputy director of the Institute of industrial economics of China Garment Association, said.

According to statistics, 12% of the world's international trade is supported by export credit insurance. Export credit insurance plays an important role in exporters' choice of flexible trade payment methods, reducing credit risks and enhancing export competitiveness. However, Chinese enterprises do not attach enough importance to export credit insurance, and their sense of credit risk is asymmetrical with their business scale and export scale.

In addition, at present, the export trade enterprises lack the way to understand the trade clients' credit, which causes the exporters not to know enough about their customers' information.

At present, the insurance coverage rate of domestic enterprises is less than 6%, far lower than the 12% to 15% foreign insurance level.

"The insurance rate is too low, which is a very serious problem."

Chen Guoqiang said, "this aspect is related to the poor awareness of risk prevention of export enterprises. On the other hand, enterprises that are already strained by capital can not afford to take out extra money to insure them."

Yang, director of the Export Department of a textile enterprise in Shaoxing, told reporters that the premiums exceeded their affordability. "Even if they go to insurance, they will not know which foreign markets can be insured and whether the insurance agencies can give timely notification of the risks they are facing."

Obviously, there is no bottom line for these questions.

China Export and Credit Insurance Corp, a national policy insurance company specializing in export risk management of enterprises, is responsible for helping exporters to avoid political and commercial risks in international trade.

But in Mr. Yang's view, he does not have a clear concept of export credit insurance companies. As far as insurance is concerned, the distance seems far away.

Experts: trial credit management agency system can be tried.

In this regard, experts suggest that small and medium-sized foreign textile and garment enterprises can consider the implementation of credit management principal-agent system.

Direct customer credit risk management