Exports Of European And American Orders "Shrink", "Made In China" Advantage Still Exists

What is the foreign trade situation facing China?

On the 110th Canton Fair, known as China's foreign trade "weathervane" and "barometer", the reporters carried out on-the-spot observation.

Export orders in Europe and America shrink

Affected by domestic labor and

Chi Kun, sales director of Qingdao Di Di electrical and mechanical Polytron Technologies Inc, told the first financial daily, the Department of the company every year.

In contrast, Zhejiang neutral Group Limited is a bit more fortunate.

The company is a manufacturer of bicycle locks. Its products are mainly exported to Japan, the European Union and Southeast Asia.

Zheng Jinming, its marketing manager, told reporters that European orders declined by 20% this year, but the slowly recovering Japanese market and rapidly growing South American and Southeast Asian markets can make up for this deficit gap.

Professor Xiao Yaofei, deputy director of the international economic and Trade Research Center of Guangdong University of Foreign Studies, told reporters that 2009 was the most affected year by the financial crisis. The decline in 2009 was relatively large.

In 2010, the recovery grew faster.

This year, compared with last year, it has recovered to a certain extent, and the callback has increased. But this year, the growth rate is certainly not as fast as that of last year.

Exchange rate changes "swallow" export profits

The impact of exchange rate changes on export enterprises is becoming increasingly evident.

Zhang Siwei, general manager of Ningbo Yongfa Group Co., Ltd., which runs a safe business in the EU market, told reporters that since the company had 20 years of sales history in the safe area and established a relatively sound sales network, the economic situation had no great impact on them. However, the continued appreciation of the RMB exchange rate caused the loss of the company's profits.

Zhang Siwei said that the RMB exchange rate continued to appreciate in both the US dollar and the euro, and the appreciation of the euro would be even greater, which would have a great impact on the profits of export oriented enterprises.

In addition, because of the uncertainty of exchange rate, their products can not raise prices one step at a time, they can only raise their prices step by step.

Zhang Siwei said that because of the exchange rate problem, his company lost 4 million ~500 yuan a year.

Therefore, he hoped that the government could provide more targeted countermeasures to SMEs to help them avoid risks.

In this regard, Xiao Yao Fei said that the trend of RMB appreciation is hard to reverse.

However, if the interval of appreciation is 3% per year, the problem is not big, but if the price of raw materials and labor costs are high, the pressure will be great.

Rising costs pass on product prices

At present, because of the rising cost of domestic labor and raw materials, the prices of many export enterprises are also increasing. Many European purchasers who come to the Canton Fair are more cautious. Enterprises and buyers tend to be short and small in the next 3 months.

Giorgos Papathanassiou, a Greek buyer, bought a cheap and cheap mechanical and electrical parts and dragged a suitcase to "sweep the pavilion" on the first day of the Canton Fair.

However, after a day's visit, Papathanassiou thought that the price of the product was not as low as he imagined. At that time, the economic depression in Greece also made him unable to make a big hand. He decided to stay for the last day to decide how much to buy.

Papathanassiou told reporters that the debt crisis in Greece is already reducing its sales by 30% over the same period last year.

Earlier, the correlation analysis shows that China's labor advantage is gradually being replaced by some other emerging market countries, such as India and Bangladesh.

Zhang Siwei, a company headquartered in Ningbo, told reporters that he had witnessed the worst period of recruitment in coastal enterprises like Ningbo.

He said that after the Spring Festival this year, the wages of workers increased by an average of 30%, but it is still difficult to recruit skilled workers. Only a year ago, only a price of 2500 yuan could bring in a skilled worker.

In order to avoid the pressure brought by the rising labor costs, Zhang Siwei chose to move his factories to Guangxi and other places, and also set up a joint venture factory in Vietnam.

The advantages of "made in China" still exist

However, Zheng Jinming offered another view: India's labor force can be very cheap, some factories employ child labor, and even pay 5~6 dollars per month, while in China, the average monthly wage of each worker is 500 dollars.

But in spite of this, in his field of bicycle locks, he did not feel the competitive pressure from his colleagues in India, because today's customers are not as early as pursuing cheap prices, but also have the quality requirements.

The core competitiveness of Chinese enterprises is still there. Taking his own company as an example, he said that the perfect sales network, production capacity and development team that they had had not been replaced by India counterparts overnight.

Zhang Siwei also admitted that although China's export enterprises are facing the pressure of continuous appreciation of RMB and intensified international competition, there are still other competitive advantages that other emerging market countries can hardly replace. First, "made in China" has been developed internationally for decades, and the quality of products has been integrated internationally. Two, Chinese enterprises have the advantage of scale and can receive large orders from international retail giants like WAL-MART.

Carrefour Global Sourcing president Wu Bo Ye expressed confidence in the competitiveness of "made in China" and said that even if the debt crisis in Europe and the United States was raging, Carrefour would not reduce its purchases in China, but on the contrary, it would also increase.

At present Carrefour's global purchases are 72% from China, including Hongkong.

Wu Bo said: "not only China, but over the past few years, the price of consumer goods has been rising, so we find that there is no substantial change in the price difference between China and other countries.

As buyers, we will still compare prices and seek better quality and better prices. In this regard, China's competitiveness is still very strong. Of course, China's competitiveness may not be as strong as before, but on high quality products, China is still a very attractive procurement market.