On The Problems Of China'S Export Enterprises

2007 was the sixth year of China's accession to the WTO.

These six years are the golden period for the development of China's export enterprises: China's export trade has maintained a strong momentum, with an average annual increase of 13%, higher than that of the global trade in the same period. China's bilateral trade with the European and American countries has maintained a favorable balance for many years, and the ranking of international trade has moved forward. The world bank predicts that in 2020, China's foreign trade share of world trade is expected to become the second largest trading country in the world (after 12% of the United States).

However, opportunities are often accompanied by risks.

In the era of accelerated globalization and increasingly fierce competition, the merger of Chinese export enterprises, the banner of flag changing, and even the closure are also common.

How to seize opportunities and avoid risks is a problem that every enterprise must seriously consider.

Before that, we must first understand the current problems of Chinese export enterprises.

First of all, changes in the objective environment have a major impact on China's export enterprises, mainly reflected in: first, the appreciation of the renminbi has weakened the competitive advantage of China's export enterprises.

For a long time, appreciation of the renminbi has been a topic of interest worldwide.

Since the implementation of China's foreign exchange reform in July 21, 2005, the ratio of US dollar to RMB has risen all the way: the ratio of US dollar to RMB on the day of foreign exchange reform was 1:8.11; in May 15, 2006, it rose to 1:8; in September 28th the same year it climbed to 1:7.9; in January 11, 2007, the exchange rate of US dollar against RMB broke through the 1:7.8 pass, and the cumulative appreciation rate was about 5.79% before the reform.

The appreciation of the renminbi has had a profound impact on consumption, investment, foreign trade and other fields, especially on export trade.

As we all know, China's export trade is mostly concentrated in textile, clothing, manufacturing, electronic processing and other labor-intensive industries.

The main competitiveness of these industries is the obvious price advantage of their products compared with similar products in other countries.

Because of the low technical content, low added value and small difference between products, the export price elasticity of these industries is correspondingly smaller. Once the price advantage is lost, the market demand for products will be greatly reduced, which will have a huge impact on the export of products.

On the other hand, the appreciation of RMB will inevitably lead to the corresponding increase in labor costs and other production costs, forcing exporters to raise their prices in order to maintain and consistent profits levels, thus further weakening the price competitiveness of products in the international market.

In the short term, the appreciation of the renminbi will lead to a slowdown in the growth rate of China's export industry and a decline in profitability. In the long run, if the RMB appreciation continues to rise or the appreciation rate is too large, the negative effects caused by the appreciation will certainly continue to expand.

Take the textile and garment industry as an example: textile exports account for about 20% of China's total exports, and play a very important role in China's foreign trade.

However, from the present point of view, the textile and garment industry is also the biggest industry affected by the appreciation of the RMB because of the dependence of the textile and garment industry on exports by 50%.

The appreciation of RMB has greatly weakened the price competitiveness of China's textile and apparel products in the international market.

According to the relevant research, the profit rate of cotton textile, wool textile and garment industry will decrease by 3.19%, 2.27% and 6.18% respectively, if the value of RMB rises by 1%. If the RMB appreciates 3%, it may erase the average profit level of the domestic textile and garment industry.

In addition, China's household electrical appliance industry, communications equipment, computers and electronic equipment manufacturing industries are also affected by the appreciation of the renminbi to varying degrees: similar to textile products, household appliances also gain relative advantages in the international market by low cost, and exports have become an important force in stimulating the growth of household appliances industry.

However, it is estimated that if the appreciation of RMB is 2%, 8% of the profits will be lost, and the growth of the total output value of household appliances will drop by 3 percentage points.

In 2004, China's communications equipment, computers and electronic equipment manufacturing industry's dependence on exports reached 60.1%.

It is estimated that once the RMB appreciation is 2%, the loss of export of communications equipment, computers and electronic equipment manufacturing industry will exceed US $2 billion, and the growth of total industrial output value will drop by 2 percentage points.

It can be seen that although the degree of adverse impact of RMB appreciation on export enterprises in different industries is different, its impact on export enterprises and even on China's foreign trade is obvious and can not be ignored.

How to eliminate the negative effects caused by the change of RMB exchange rate on export enterprises is a new topic before the enterprises in the new era.

Second, frequent anti-dumping investigations against Chinese export enterprises are a big problem for Chinese exporters.

The so-called anti-dumping refers to the legal measures taken by importing countries which are damaged by dumping commodities to protect their industries.

It is reasonable to take anti-dumping measures to stop dumping, but if the implementation of anti-dumping measures exceeds its reasonable scope or reasonable level, anti-dumping measures will also become a protectionist measure, thus impeding the export trade of foreign countries.

With the rapid and rapid development of China's foreign trade, anti-dumping investigations against Chinese export enterprises are also becoming increasingly fierce: in August 1979, the export of saccharin sodium in China was investigated by the European Union, which is the first time that Chinese enterprises have faced anti-dumping investigations.

Since 1995, anti-dumping cases against China have shown a rising trend. China has ranked first in the global anti-dumping list for the eleven consecutive year, and has become the primary counterpart of the international anti-dumping complaint.

According to WTO statistics, the number of anti-dumping cases in China was 6.5 in 1980s, rising to 30.5 in 90s and 47 in 2001 to 2004 respectively, and 11 in the first quarter of this year.

From 1995 to 2006, the proportion of China's anti-dumping cases in the world's similar cases is illustrated.

The number of countries and regions that have imposed anti-dumping on China is increasing day by day.

Many developed countries such as India, Mexico, Iran and Chile have also filed anti-dumping charges against China in addition to some developed countries, such as the European Union and the United States, which began dumping anti-dumping measures against China since the 80s of last century.

In 2006, for example, in January, the inter departmental International Trade Commission of Ukraine decided to initiate anti-dumping investigations on imports of ball bearings from any third country, including China. In May and July, the Brazil auto parts owners Union asked the government of Brazil to take "special safeguard measures" for parts such as batteries and automotive bearings imported from China for two times. In August, the Egyptian Ministry of trade and industry announced that it had accepted written applications from local enterprises and launched a new round of reexamination on imports of cars and light truck tires from China. In November, India proposed anti-dumping investigations on China's printed silk fabrics.

The industry and products related to anti-dumping in China are gradually showing a trend of diversification, involving many industries such as Minmetals, machinery and electricity, light industry, textile, food, soil and animal products.

The frequent anti-dumping investigations against Chinese export enterprises have caused significant economic losses to Chinese export enterprises, and even seriously affected the survival and development of Chinese export enterprises, and also brought tremendous pressure to Chinese society.

In this wave of trade protectionist anti-dumping, as of 2006, China's export products have been subject to more than 500 anti-dumping investigations, involving more than 13000 enterprises in China, and over 4000 products. The export trade affected by it has reached US $about 17000000000, resulting in potential unemployment of 4.5 million people, which has seriously affected the export trade of our export enterprises and the development of our economy.

Third, excess production capacity and insufficient domestic market demand add to the burden on export enterprises experiencing anti-dumping.

It has always been the dream of Chinese enterprises to "go abroad". "Export earning" is one of the important criteria for measuring whether an enterprise is successful or not.

On the one hand, in order to strive for greater profits and expand export volume, many export enterprises only blindly expand their production capacity from their own interests, resulting in the rapid saturation of the domestic market; on the other hand, because most of the export enterprises are in the labor intensive industries such as textile, manufacturing, production and processing, the GDP and tax revenue growth and employment increase are obvious. Some local governments ignore the macro layout of the industry and encourage the rapid development of these industries, resulting in excessive investment in some areas and sectors and causing excessive competition in the industry.

Taking the textile industry as an example, according to the relevant survey data, the chemical fiber industry has invested more since 2000, especially the polyester capacity increased from 4 million 900 thousand tons in 2000 to 18 million tons in 2005, an increase of nearly 3 times, while the average operating rate was only 70%.

Textile capacity increased from 34 million in 2000 to 75 million in 2005.

At the Canton Fair in the two quarter of each year, a large number of Chinese producers and sellers are duplicated and eager to bid for price competition.

Under such circumstances, when the export enterprises of China's textile industry encountered anti-dumping investigations and the volume of exports dropped sharply, the already saturated domestic market simply could not help these export enterprises to relieve pressure.

As the most anti-dumping investigation, textile enterprises have to be in a dilemma.

In fact, this has become one of the difficult problems that many Chinese export enterprises are facing or will soon face.

How to optimize the industrial layout, coordinate the capacity of the export enterprises and the acceptance of the domestic and international markets, and reduce the blind and unordered competition in the industry, is very important to alleviate the enormous pressure of the export enterprises to face the anti-dumping investigation.

The impact of the objective environment on China's export enterprises can not be ignored, but the export enterprises themselves have some problems, which also constrain the development of enterprises.

First, lack of understanding of the international market and blindly go abroad.

As the saying goes, know yourself and know each other, and fight for ever.

It should be recognized that the foreign market system has already formed a relatively sound system, which is like the "rules of the game".

To win in the fierce market competition, we must understand, adapt and even use the rules of the game in the international market.

However, many Chinese enterprises, in the absence of a basic understanding of the international market, take a fluke mentality and simply use their practices in the domestic market to enter the international market hastily.

When investigating the 700 export production enterprises in Shanghai and Jiangsu, the relevant agencies found that 69.3% and 75.9% of enterprises in Shanghai and Jiangsu did not know the export price of their products. 87.5% and 90.4% of enterprises did not understand the general price of similar products in the world. 92.2% and 95.3% of enterprises did not know their product share in the international market.

As we all know, Shanghai and Jiangsu are one of the most developed provinces and cities in our country, and the connection with the international market is far ahead of other provinces and cities.

However, the export enterprises' information on export products is so limited that enterprises in other places can imagine.

For example, in recent years, China's export enterprises have frequently encountered anti-dumping investigations abroad. How many export enterprises really understand the implementation of the relevant provisions of the anti-dumping countries and the relevant provisions of the world trade organization, the general anti-dumping procedures in the world and the anti-dumping procedures of the anti-dumping countries, as well as the basic characteristics and the main problems faced by China's export products being subjected to anti-dumping in foreign countries?

Lack of understanding of the international market has not only hindered the success of enterprises in the market competition, but also related to the survival or death of enterprises. It is related to whether enterprises can take timely and effective means to protect their legitimate rights and interests when they are subjected to unfair treatment.

Two, the low price as the only weapon to the international market, lack of innovation consciousness.

"Beautiful and cheap" is a dogma that many Chinese enterprises believe in.

Making use of the cost advantage of "made in China" is a "stepping stone" for most Chinese enterprises to enter the international market, and to a certain extent, helps export enterprises to expand sales and gain considerable profits.

It is precisely because of the initial victory that many export enterprises are firmly embraced.