Leather Trade Situation Has Undergone An Essential Change.

In July 31st, the Ministry of Finance and the State Administration of Taxation announced that since August 1, 2008, the export tax rebate rate of some textiles, pesticide products and other commodities has been adjusted, and the export tax rebate rate of some textiles and clothing has increased from 11% to 13%.

This is the first pullback since China launched the foreign trade policy of lowering the export tax rebate rate in 2006.

But is this adjustment based on the labor intensive characteristics of the industry and the slow down of the upgrading of the industrial structure? Or is it a signal of the great changes in the foreign trade policy?

Recently, Long Guoqiang, Vice Minister of the Ministry of Foreign Economic Research of the State Council Development Research Center, who has deeply studied the export trade policy, the development of external demand and the international economy, has accepted an exclusive interview with this newspaper.

Before, he went to many places to conduct in-depth research. Recently, he gave his own policy recommendations at the expert meeting of the State Council.

The foreign trade situation has undergone fundamental changes.

Twenty-first Century: foreign trade growth is still above 20% in the first half of this year. Is the situation still optimistic?

Long Guoqiang: in the first half of this year, the total volume of foreign trade increased by 21.9%. In nominal terms, it was still very high, less than last year.

The problem is that this year's 21.9% is different from previous years. It was achieved on the condition that the US dollar depreciated greatly and the RMB depreciated greatly.

In the first 6 months, the export growth rate in dollar terms was 21.9%; the growth rate in Renminbi denominated exports was only 11.2%.

Nominal growth figures are high, but real growth is already very low.

If domestic inflation is to be deducted, there will be only one digit growth.

Since the Asian financial crisis, the real growth rate of exports has reached its lowest level in the first half of this year.

In terms of specific industries, different industries are facing different situations.

In the first five months, according to the category of Customs products, artworks and other exports showed absolute negative growth; the growth rate of leather and wood products was also very low, the nominal growth rate was around 10%; the growth rate of textile and clothing was 16%, but in some areas, such as Guangdong Province, the growth of textiles was negative by more than thirty percent, which has dropped by 1/3 compared with last year.

Twenty-first Century: has the cause of rapid export growth changed in the past?

Long Guoqiang: indeed, on the one hand, the demand for exports is changing.

For example, the United States used to borrow money from the world to get domestic consumption, but they did not save it. As the largest consumer in the world, the United States has stimulated the growth of the world economy by consumption, but now the United States has begun to export to the outside world, which means that the US economic growth has begun to take up external demand, that is, the GDP of other countries to stimulate growth.

For domestic enterprises, the export mode has been changing in the past, and the era of export low cost has come to an end.

After China's accession to the WTO, the average growth rate of foreign trade is 28.8%, the highest growth year has reached 35%.

The average annual growth rate of world trade is 12%.

China is the second largest exporter, with a growth rate of 20%~30%, which has increased the world's growth rate by several percentage points.

If China is cut off, the growth rate of world trade is only one digit.

At the beginning of reform and opening up, the export competitiveness of China's finished products was relatively low.

For example, the proportion of manufactured goods in exports is only 46%.

Now, 94.9% of China's exports are manufactured goods, and 57.6% of 2007 is the mechanical and electrical industry.

Why is such a big achievement achieved? The main reason lies in the enhancement of international competitiveness in attracting foreign capital and domestic manufacturing.

This is achieved by two lines: first, the absorption of export oriented foreign enterprises, Japan, Korea, Singapore, Taiwan and Hongkong. After the rise of local labor costs, the pfer to China and the integration of low-cost labor forces China to integrate into the East Asian production network, and ultimately rely on the processing trade that has entered the world and export to the world.

58% of China's exports were completed by foreign-invested enterprises.

This line is very successful.

The other line is China's implementation of a series of export incentives, including RMB depreciation, export tax rebate and other policies.

China is now the world's most competitive low cost manufacturer, with 774 kinds of manufactured goods, China's exports ranked first, and its total exports now surpass that of the United States, ranking second in the world.

Twenty-first Century: but a series of favorable conditions for export have changed. Do you agree?

Long Guoqiang: Yes, for example, the appreciation of the RMB is speeding up.

Now 1 dollars to RMB is 6 yuan 8, and everyone feels very strong.

But in fact, the yuan used to be very valuable.

In 1980, the exchange rate between the US dollar and the RMB was 1: 1.5. Later, in order to encourage exports, the renminbi depreciated all the time, and the most severe one was at the end of 1993. At the end of 1993, the black market had exceeded 1: 10, and the dollar was worth 11 yuan.

After the merger of the exchange rate in 1994, it changed to 1: 8.7, and then gradually entered the stage of appreciation. The Asian financial crisis interrupted the process and became a fixed exchange rate mechanism.

Beginning in July 21, 2005, a managed floating exchange rate mechanism began to take place. Under this mechanism, the renminbi began to rise more than ten points.

I think RMB appreciation is the result of rapid economic development and rapid improvement of China's international competitiveness.

Twenty-first Century: you often investigate some foreign trade enterprises. At present, the export situation is worrying. What are the problems for the enterprises?

Long Guoqiang: I think there are multiple factors.

It can be divided into several aspects. When I went to research, someone figurative was "seven wolves (16.50, -0.20, -1.20%, bar)".

First, the price rise of raw materials.

From the increase of global primary commodity prices to the extreme end of domestic export processing enterprises, some enterprises are hard to digest.

If the price of copper rises, there are hundreds of Wenzhou lighters, and now only a few dozen.

Now the copper for lighters is from the original 15000 yuan / ton to the current 60000 yuan / ton.

Lighter is a low-grade product and can not be pferred.

The two is the rise of labor costs. Because of the new labor contract law, some SMEs have increased the cost of 20%~30%.

The three is financing. Macro tightening monetary policy, because of the increase in interest rates, increase the financing costs of enterprises, and the control of credit scale, banks are more willing to lend money to large enterprises, resulting in many small and medium-sized enterprises that export can not afford money.

The four reason is the policy. Since the second half of last year, a series of policies, such as the calculation of the margin of processing trade, the reduction of export tax rebate rate and the Levy of export tax, have had a certain inhibitory effect on export growth.

The five is the accelerated appreciation of RMB. In the first half of the year, we gained five percent points and nine points.

The six is the decline of external demand.

The export industry is in a state of internal and external difficulties, and more factors play a role simultaneously.

In the original state of good, the introduction of this series of adjustment policy (differential adjustment), in order to slow exports, and promote the pformation and upgrading of export structure, will be better.

However, the upgrading of industries is by no means mobilizing and calling up. It must be driven by market forces.

The main problem is that when the export faces too many difficulties, it will cause a large area of enterprises bankruptcy and unemployment, threatening the whole social stability, and the economic growth rate will fall rapidly.

From a demand perspective, it contributed 2.7 percentage points last year.

If the trade surplus is reduced this year, 2.7 percentage points will be gone; and if domestic demand investment is down, the growth rate in the second half of this year will be even lower.

Economic growth is likely to face a risk of rapid fall.

Raising the export rebate rate is just a signal.

Twenty-first Century: in July 31st, the export rebate rate of textile and garment industry increased by 2 percentage points. Is this the adjustment of foreign trade policy?

Long Guoqiang: I think this is a signal.

Some changes have taken place in the export policy of the country.

The state attaches great importance to the difficulties faced by labor-intensive enterprises, so we take some measures to prevent the export from falling too fast.

Adjusting the export tax rebate rate will help to prevent export from falling too fast and help solve the employment problem.

At present, the real growth rate is very low.

There are some natural disasters that can not be managed, only to reduce the losses caused by human beings.

For example, to ease the pressure on enterprises, export tax rebate is a more immediate measure.

Twenty-first Century: is there any need for a change in macro policy?

Long Guoqiang: last year was the highest point of this economic cycle growth rate. This year's fall is inevitable. The situation in the second half of this year is still very grim. The dilemma we are facing now is whether to maintain growth or to control inflation.

From a central point of view, from the "two prevention" at the end of the year (to prevent the economy from being too fast to overheating, to prevent price from structural rise to full inflation), to maintain stable and rapid economic growth this year, two is to control inflation within the social affordability, and it is clear that the situation is changing.

This year, the CPI control target is 4.8%.

But from last October to now, the situation at home and abroad has changed greatly, and the actual price increase is relatively high.

So it is impossible to stick to the 4.8% goal.

Because too much austerity can cause more harm to economic entities.

Therefore, it is necessary to strike a balance between several macro objectives: the speed of economic growth is relatively high, do not drop too much; prices should not rise too much, and ordinary people can afford it.

Under the new target situation, the whole macro policy guidance in the second half of the year will not only maintain higher growth but also keep inflation from rising.

Some policies will be adopted, and the whole tone of the tight monetary policy will not change, but some structural adjustments will be made, especially in terms of employment and financing of small and medium-sized enterprises, which will create some better conditions.

Twenty-first Century: what are your suggestions on specific fiscal and monetary policies?

Long Guoqiang: some structural positive fiscal policies can be tried, such as increasing support for agricultural production, support for innovation, export tax rebates, tax relief and tax raising.

In the face of inflation, many middle and low income families have suffered considerable damage in this round of inflation, because this is mainly a food price increase.

Many middle and low income families have a Engel coefficient of 50%~60%, and food prices doubled. All the money is eaten at this time.

We must stabilize agricultural production.

In the case of rising global grain prices, there is a big problem. Many food exporting countries, including traditional exporting countries such as Thailand, are the first to restrict grain export, which is a great blow to grain export trade.

After this round of games, for the importing countries, the "liberalization" of the global grain trade may be prolonged under this policy.