Six Unfavorable Factors Oppressing Small And Medium Sized Foreign Trade Enterprises

Six unfavorable factors oppressed small and medium sized foreign trade enterprises to enter the "life and death decision". "From the second half of last year, I was afraid to take orders from foreign countries, changing long-term orders to short-term orders, changing orders for big orders", Mr. Chang, who is engaged in export trade, summed up his recent business situation.

Mr. Chang began to engage in export trade a few years ago, but at present, his foreign trade company has basically stopped all businesses and become a shell company.

In his words, the export environment is bad, raw material prices and labor costs are rising. This is the best way to preserve strength in situ.

"Wolf used to be a metaphor for a powerful foreign brand invasion, but in fact, we are facing too many difficulties at the moment, which is a real wolf era."

Mr. Chang's main business is exporting garments, shoes and leather goods.

Suppliers on the whole industry chain are superior to Mr. Chang.

During the interview, the reporter was informed that in the PRD footwear trading company, the export price was raised by 30%-45% to keep the cost.

Fall down?

Wait for death?

Or suicide?

This is a difficult proposition.

"Who moved my cheese" is the best selling book in the world. It interprets the truth of life: change is the only thing that remains unchanged.

How should the small and medium-sized manufacturing enterprises in the PRD respond to this life and death proposition under all kinds of crises?

"Foreign orders are afraid to pick up". The Pearl River Delta has a very high export-oriented economy. It is an important export commodity production base in Guangdong and even the whole country.

There are a large number of small and medium-sized foreign-funded enterprises and private enterprises, mainly engaged in processing trade and OEM, products are mainly exported, and traditional labor intensive industries are the main industries.

In the past few years, these enterprises relied on scale effect and cost advantage to earn meager processing fees. They could still survive. But recently, many enterprises began to appear to avoid foreign exchange orders in order to prevent exchange rate risks. They also changed their long-term orders to short-term orders, changed large orders to small orders, reduced total orders and reduced export volumes.

According to the National Bureau of statistics, during the first quarter of this year and the 103rd Canton Fair, enterprises in Shenzhen, Dongguan, Zhongshan and other places further reduced the number of orders and reduced the scale of production.

The export of traditional bulk products such as textiles, clothing, shoes, bags, furniture, plastic products, machinery and electronics has dropped sharply or declined.

Taking Shenzhen as an example, the export of bags and shoes and shoes increased by 3.9%, down 16.2% from the previous year, and exports of furniture and parts increased by 16.3%, down 23.7% compared with the same period last year, and the export of clothing and textiles decreased. 14.5%., Deputy Secretary General of Guangdong footwear manufacturers, introduced Yang Yelin. Taking footwear exports as an example, the appreciation of the renminbi resulted in a decline in export profits. The rise of domestic CPI led to a rise in the cost of raw materials.

"Foreign orders are afraid to pick up. Some companies have not even understood what is going on."

Under the double influence, the shoe industry shuffling is intensifying.

Yang Yelin, Deputy Secretary General of Guangdong Footwear Manufacturers Association, pointed out that the footwear industry, for example, will be constrained by five factors: exchange rate fluctuations, manpower shortages, raw material prices, domestic policy changes and foreign anti-dumping policies.

"Now there is another oil price increase."

He said that this has an impact on all walks of life, the impact on the footwear industry is mainly concentrated in chemical raw materials, logistics costs and so on.

"If we do not start work, we will go bankrupt and start to lose money."

This vividly reflects the main problems prevailing in the PRD footwear industry.

"Now that iron ore prices are rising so fast, there are two problems.

First, the stockholders of raw materials make the metal price higher; the two is that our steel price has no advantage compared with that of the United States.

The boss of a small hardware processing enterprise in Lecong, Foshan, sighed that the implementation of the new labor law led to a rise in labor costs, which made the hardware industry worse.

"For foreign trade companies, our biggest problem now is the difficulty of drawing orders."

A staff member from a foreign trade company in Guangzhou told reporters, "hardware, clothing, quality toys, foreigners are very sensitive to price."

The price is low, we can't find factories to do it, the price is high, foreigners do not buy it. "

"At present, more than 80% of our own brand exports are settled in US dollars. If we do not want to deal with them, 10% or even more exchange rate losses will squeeze us less than 10% of our export profits."

To this day, when the renminbi has reached a new high with the US dollar, the loss of profits caused by exchange rate is a chronic but huge impact on some export-oriented enterprises who are keen on exports, and the profit margins are small and mostly settled in US dollars.

A lighting company always said, "although the export products have been increased, they have been eaten up by the RMB appreciation immediately. This kind of small step run up appreciation is a chronic impact on enterprises."

In addition, because of the poor credit foundation, the financing difficulties have been increased.

Many enterprises fail to meet the risk control standards of banks. Under the premise of tightening the economy, SME loans and financing are difficult.

Technology upgrading, which is obvious that in the background of increasing labor costs, increasing RMB exchange rate, raising bank interest rates and adjusting export policies, the technology upgrading seems to be no longer feasible, and the road of OEM for small and medium-sized enterprises has come to a crossroad.

Many small and medium business owners are still struggling to find a way out.

Recently, the price of daily chemical industry and footwear industry has increased.

However, in the buyer's market, the bargaining power of these brands is very low. According to the Pearl River Delta's footwear trade company, it is expected that only the export price is up 30%-45% to keep the cost, but the foreign buyers have not yet fully accepted this range, which leads to a sharp decrease in the trade companies.

On the other hand, the boss of the daily chemical industry said that only by reducing the expenditure of internal activities and publicity activities, reducing the production of some products and organizing the study of employees, the operating pressure caused by the decrease of cost rising customers was suppressed.

In order to reduce costs, some Foshan Lecong hardware enterprises began to pfer industries to lower cost areas.

There are also enterprises that can avoid this bloody storm -- investing a lot of money to upgrade the industry.

Although 40% of the small businesses in the lighting industry opted out of competition, NVC has invested a lot of money recently to set up R & D centers in Shanghai and began to expand the capacity of various production bases.

In addition, it has become the first brand of small household electrical appliances in the world, and has begun to attack the domestic market with its ACA brand acquired in North America.

Industry experts pointed out that to enhance the competitiveness of the brand, it is bound to require enterprises to enhance bargaining power, technology upgrading and price increase, both hands must be hard.

Yin Kang, vice president of Huizhou Rex Optoelectronics Technology Co., Ltd. believes that macroeconomic regulation and control is not pferred by the subjective will of the enterprises. Since the enterprises are unable to change the industry, they can only seek new market opportunities in the unbalanced industry.

"The government is still growing in fixed asset investment, but it is only a small increase. But in the construction of large industries, such as the Beijing Olympic Games, Shanghai fair, Guangzhou Asian Games and Shenzhen all England Association, these government led investments are very large.

In such a region, there will be an average growth rate.

We don't need to be too pessimistic. "