OEM Enterprises Frequently Reject Foreign Trade, Ministry Of Commerce Investigates Export Risks

"How can we say no more than a few hundred thousand dollars of a multinational company?" Hailing import and export in Quanzhou, Fujian

Raymond Lam, general manager of the limited company, was very angry. In July this year, Raymond Lam went to court in Shanghai Auchan supermarket Limited (hereinafter referred to as Auchan) and asked him to continue to perform the contract, take the goods and pay the loan and the corresponding interest.

In fact, Raymond Lam's experience is not the first in Fujian.

Since last year, the demand for the global economy, especially the European market has shrunk sharply, which has increased the risk of export. Some of the reputable multinationals also have been in arrears or temporarily cancelled orders, which has brought huge losses to some foreign trade foundry factories.

According to the data provided by China Export and Credit Insurance Corp Xiamen branch, the number of reported cases in Europe is the largest in the first half of this year, accounting for three points of the total number of cases, an increase of 20% over the same period last year.

Greece and Italy are the most serious.

The rejection of foreign trade has also attracted the attention of relevant ministries and commissions.

Miu Zhentang, deputy director of the export and import Fair Trade Office of the Fujian foreign trade and Economic Cooperation Department, told reporters that "the Ministry of Commerce's industrial damage investigation bureau is now doing an export order analysis in order to understand the actual situation."

Angry exporter

Raymond Lam Hailing import and Export Trading Co., Ltd. is a foreign trade enterprise specializing in foreign trade.

At the beginning of 2011, Shanghai Auchan, through an agent company, gave orders to Raymond Lam's factory, including more than 10 thousand bras and 2.8 or more shorts, with a total value of $more than 330 thousand.

"In January of this year, the sample was confirmed in March, but in a few days, Auchan suddenly sent an e-mail notice to cancel more than 2.8 thousand shorts, resulting in a loss of $more than 10 thousand in fabric, and the remaining more than 10 thousand brassiere were completed on time in July. The goods which could have been pported by sea were asked to go by air after two months of repeated confirmation by Auchan."

Raymond Lam said.

Raymond Lam told our reporter that air freight is equivalent to 30% of the profits lost, but in order to ship, Raymond Lam finally accepted.

So more than 10 thousand pieces of bra were shipped to the Xiamen port at designated freight forwarding warehouse according to the requirements of Auchan. When he was about to deliver the goods, Auchan called again and said that the goods were not allowed.

In order to avoid paying the high deposit cost, Raymond Lam had to pull the goods back to the factory, so far the more than 10 thousand bra still lie in the warehouse.

"The goods were produced according to the requirements of the other party, and passed the test of Austin's harsh ITS (Intertek Testing Services, one of the largest industrial and consumer products inspection companies in the world), and the inspection of BV (Bureau Veritas, French National Standard Inspection Bureau), and more than 10 thousand goods had been dragged to the designated freight forwarding warehouse of Auchan, and the freight forwarder seal had been affixed. The other party suddenly said" no, "what do we do?" Raymond Lam was helpless and angry.

In a fit of anger, Raymond Lam's company sent Ou Shang to the court in Huli District of Xiamen, requesting the other party to continue to perform the contract, and immediately withdraw the goods and pay the corresponding amount and bear the overdue interest.

In July 24th, the court accepted the case.

Exports to Europe are more risky.

Coincidentally, Zheng Kaiyun's company has experienced the same experience.

In the second half of last year, Zheng Kaiyun exported a number of REACH certified sports shoes worth about 200000 yuan to the French port, but Auchan refused to pass the test.

In the end, Zheng Kaiyun had to sell the shoes to middlemen.

European market demand has fallen sharply, which is almost the consensus of the foreign trade industry, "Zheng Kaiyun said." now exports.

They are extremely cautious.

Yan Xiaoling of Xiamen Tai Mei Si import and Export Co., Ltd. also said that since the beginning of last year, her company has stopped the European business and changed into the marble import trade.

Zhang Xiangrong, the sales director of a foreign trade enterprise in Fuzhou, told the newspaper reporters that his contact colleagues said that the European market order fell seriously, generally around 30%-40%.

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Affected by the continuous fermentation of the European debt crisis, Zhang Xiangrong's main line of European second-line brand shoes has dropped considerably, while some large chain stores have been holding up prices.

The data show everything.

The data provided by the Fujian branch of the insurance company showed that: in the 1-7 month of this year, its short-term export credit insurance undertook the amount of US $4 billion 770 million, the loss amount amounted to US $40 million 990 thousand, and the reported loss increased by 87.7% over the same period last year.

According to data from Xiamen branch, the compensation amount in the 1-8 months of this year amounted to US $10 million 740 thousand, which exceeded the level of last year. One of the serious cases is that a Holland buyer has gone bankrupt and claims up to US $about 4000000.

Zhang Wu, the business management office of Fujian branch, told the newspaper that in the distribution of reported losses, the western countries such as Greece and Italy accounted for the largest number. Asia's India, Korea and some Middle East countries also had more. In the reported cases, the amount of arrears was the majority, and the growth of the cases of abandonment and refusal was obvious.

Other factors related to foreign trade risk are the low penetration of export credit insurance in Fujian. The penetration of credit insurance Fujian branch and Xiamen branch in 1-7 months is 20% and 29.4% respectively, which are lower than the 30% standard in Europe and America.

Because many foreign trade pactions have been achieved online, small businesses have difficulty in maintaining pnational rights and have high costs. Even if they suffer losses, they can only be disappointed.

Raymond Lam case attorney Lin Xiaoyan told this reporter that the money she was negotiating with a company refused to pay the amount of up to 45 million yuan.

Investigation risk of MOFCOM

"The phenomenon of refusing or returning orders in the era of financial crisis and post financial crisis is more prominent."

Miu Zhentang told our reporter that the Ministry of commerce is conducting a thorough investigation.

It is understood that in the early August, Xining held the national trade relief and maintenance industrial safety training course, the Ministry of Commerce's industrial damage investigation bureau held a forum on the early warning of local industrial damage, and discussed the work plan for developing local foreign trade export order questionnaires.

Miu Zhentang said that in recent years, Fujian tried to analyze export orders, and collected samples of some representative production export enterprises and circulation export enterprises, and formed an export order analysis report.

It is reported that the export orders analysis mainly collected five data, namely the total amount of new signed orders and the change of the same ring ratio, the change of the remaining orders and the same ring ratio at the end of the year, the proportion of the total amount returned to the order, the proportion of the total amount of the returned products to the total orders, and the proportion of the rejected products involved in the total amount of the order.

Miu Zhentang believed that

Order analysis can analyze the order of foreign trade in time, and forewarn the problems of foreign trade.