Foreign Trade "Cold Winter" Has Passed, Will Rebound Bottom?

After more than a year's downturn, China's exports increased by 18.7% in March compared with the same period last year, and maintained a positive growth rate of 4.1% in April.

Some people think that the "cold winter" has been over and bottomed out.

Is that so?

Recently, journalists visited Beijing, Shanghai, Guangdong, Tianjin, Hebei, Shandong, Chongqing and other places to get a close understanding of the latest changes in China's foreign trade enterprises.

The survey found that the current situation of our foreign trade is still grim, and business operations are facing many difficulties. We can not simply use the "bottom up rebound" to describe foreign trade.

However, there is no need to worry too much about the decline in the growth rate of foreign trade.

We may turn the focus from "quantity" to "quality". Only by taking the structural reform of supply side as a guideline and promoting enterprises to accelerate the formation of new advantages in international competition, can we expect to see a strong rebound in foreign trade again.

How do you view the trend of foreign trade?

Judging the inflection point is premature, the internal and external environment is still grim, the traditional competitive advantage is weakening, we can do a dozen yuan toys, Southeast Asian countries a few yuan to get done.

"Fewer orders, more difficulties, more difficult days."

Zhang Quan, the head of a CNC machine tool manufacturer in Beijing, told our reporter that in the past few years, the business status of the export of CNC machine tools was generally good. By 2014, 1/3 was basically losing money, 1/3 was flat, and 1/3 was profitable.

Last year, 1/3 companies stopped working, and fewer and fewer companies were making profits.

After two consecutive years of high growth, China's foreign trade has been pressing for two years.

Last January, when the total volume of imports and exports dropped by over 10%, the trend of foreign trade continued to be low, and the total import and export volume decreased by 7% year-on-year.

In the first 2 months of this year, foreign trade suffered another 6.6% or 20.6% decline.

In March, the turnaround appeared to have increased by 18.7% in the month, the first two digit growth since February last year, and the 4.1% positive growth in exports in April.

At the same time, the decline in imports over the past two months has narrowed compared with the previous month.

There is a view that China's foreign trade is bottoming out and is expected to rebound strongly.

"Although foreign trade urgently needs to end the long winter, it is too early to judge the turning point by two months' data. There is a more reasonable expectation."

Li Guanghui, vice president of the Ministry of Commerce, said.

Shen Danyang, spokesman of the Ministry of Commerce, said that the export rebounded sharply in March. On the one hand, it was seasonal factors. Because of the Spring Festival in February, exports were either moving forward or pushing back, there was uncertainty. On the other hand, it was a base factor. In March last year, the export volume was the lowest in all months of the year. In March, exports increased by 18.7% over the same period last year, but only 1 trillion yuan was in the lead.

Reporters found in the survey, no matter from the perspective of international demand, or from the perspective of domestic enterprises, there is no sufficient reason to support the judgment of "strong rebound in foreign trade".

"Orders did not increase significantly in the first quarter."

Li Mei, owner of a toy manufacturing enterprise in Chongqing, said that since last year, her company's orders have been fluctuating considerably, and overall there has been a sharp decline. In the first quarter of this year, orders fell by about 10%.

The external demand downturn has not fundamentally improved.

Recently, the Ministry of Commerce conducted a questionnaire survey of 3000 foreign trade enterprises in the country, and 57.7% of the enterprises thought the export situation was more severe this year.

The International Monetary Fund recently lowered its global economic outlook again, with the global economy expected to grow by 3.2% in 2016.

According to WTO statistics, global import volume dropped by 12.2% in 2015.

In the first two months of this year, the world's 71 main economies accounted for about 8% of the world's total trade volume by 8% over the same period last year.

The environment is also not optimistic.

Global protectionism is heating up and the external policy environment facing China's foreign trade is tightening.

China's exports suffered 37 trade relief surveys in the first quarter, an increase of 55.6% over the same period last year.

"EU anti-dumping policy has a great impact on enterprises."

Xin Jiansheng, chairman of Tianjin Fujida Group Limited, said that some European countries even went against WTO's regulations in order to protect the interests of their own industries.

It is difficult for enterprises to solve similar problems. Most of the time, they can only abandon the corresponding market.

From the domestic situation, although the traditional development kinetic energy of foreign trade still has room for improvement, the new development kinetic energy is taking shape, but from the traditional competitive advantage to the shifting period of the new competitive advantage of international competition, the growth rate decline is still inevitable.

"The cost is low, but in emerging countries, brands are less developed than developed countries, and sandwiches are not easy to live on."

Guo Bin, the owner of a toy trade enterprise in Shanghai, said that before we took the order, it was a toy that we could make a price of ten yuan or 20 yuan. We could do it for a few yuan.

Now that we have more than ten yuan to make toys, some countries in Southeast Asia have done a few dollars, so we can only watch some orders "slip away".

In recent years, the cost of labor, land and other factors has been rising, especially in coastal areas. The labor cost of workers in the coastal areas is 4 to 6 times that of neighboring countries.

Traditional export competitive advantage has been weakening, and some export orders and industries have shifted to emerging economies.

In 2007, the proportion of China's processing trade in exports was 50.7%, which has dropped to 32.9% in the first quarter of this year.

In 2010, China's share in the import market of the United States and Europe's power intensive products reached 50.6% and 47.9% respectively, down to 47.1% and 43.6% in 2015 respectively, while some emerging economies in China continued to rise in the US and EU market share.

Zhao Qingming, chief economist of the China Financial Futures Exchange Research Institute, believes that China's emerging industries are developing faster, and the export of capital goods such as large scale complete sets of equipment is better than the whole. However, there is still a gap between the developed countries and the developed countries. In the short term, it is difficult to make up for the downturn in the export of traditional dominant products.

China's foreign trade is unlikely to achieve a "V" or "U" trend in the short term.

Is there a foundation for stability?

The fundamentals of foreign trade have not changed. There is no need to worry too much about the decline in growth.

Only the quality of "advance" can guarantee long-term stability.

"I can't keep up. I plan to change at the end of the year."

A certain Qingdao

Boss Jeky said helplessly.

As a veteran of foreign trade, he has gone through different stages from picking orders to finding orders and worrying orders.

As for the decline of foreign trade growth, Jeky's attitude changed from initial optimism to confusion.

In the survey, reporters found that many enterprises that had experienced the golden period of foreign trade development did not adapt or even accept the current downturn in the industry.

Without exception, they are concerned about one problem: can the growth rate of foreign trade decline?

"There is no change in the fundamentals and long-term trend of China's foreign trade development, and we are confident in achieving a stable return on foreign trade."

Li Guanghui said.

From the policy point of view, a series of policies to promote the stabilization of foreign trade have been introduced recently, and the effect will gradually appear.

In terms of industry fundamentals, foreign trade is also experiencing positive changes.

There is still room for traditional advantages.

Although the cost of land and manpower has risen, the traditional advantages have not disappeared completely, and positive changes have taken place.

For example, labor cost is changing from absolute superiority to comparative advantage, from labor cost advantage to talent cost advantage.

The head of a Japanese electronics product company in Guangdong, Dongguan, admitted that compared to some Southeast Asian countries, the wage cost of Chinese workers is much higher.

But if combined with the proficiency, productivity and water and electricity costs of workers, and then apportion to each product, China's advantage is still more obvious.

This is also one of the main reasons why the company chose to stick to China after inspecting the Southeast Asian market.

- the new growth point has gradually taken shape.

The adjustment of China's foreign trade structure has not started in recent two years, but it has been several years.

New industries, new products and new markets have been developed orderly, and a number of new growth points of foreign trade have gradually taken shape.

2015

The growth rate is more than 30%, and the export growth rate of the market purchase trade mode exceeds 70%.

Beijing's "little stupid bird" cross-border e-commerce export platform, which was launched in 2014, integrates Amazon, eBay and other overseas platforms to make domestic manufacturers more convenient to sell products through these platforms.

In a year alone, the export of the little bird is directly $400 million.

The export structure has been markedly optimized.

The export leading industry has pformed from the traditional advantageous industries such as light industry and textile to the capital and technology intensive industries such as equipment manufacturing industry. The new advantages of technology, brand, quality and service as core competitiveness have been accelerated.

Last year, the export of mechanical and electrical products increased by 0.1% over the same period last year, accounting for 1.8 percentage points.

Service trade is short.

Relative trade in goods is the first in the world, and service trade is a short board.

Today, this short board is gradually being made up.

The proportion of service trade in China's foreign trade increased from 10.3% in 2010 to 15.4% in 2015.

In 2015, China achieved a total import and export volume of US $713 billion, an increase of 14.6% over the same period last year.

{page_break}

- the international share has steadily increased.

Despite the decline in foreign trade growth in 2015, China's total import and export volume ranks first in the world.

Exports accounted for 13.8% of the world's share, up 1.5 percentage points.

Compared to 2014, it was 0.6 percentage points higher than that in 2013, and 0.6 percentage points higher in 2013 than in 2012.

"Instead of focusing on speed, it's better to focus more on quality."

Li Guanghui said that there are many new changes in the development of foreign trade under the new normal. It is obviously inappropriate to see and explain foreign trade with old eyes.

For the current foreign trade, subsidies and preferential treatment may be able to recover at a time, but not sustainable.

In the past, we were more focused on speed and more focused on quality in the future.

Only the quality of "advance" can guarantee long-term stability.

"Some foreign trade small businesses have a saying, such as" no brand "and so on." I don't think so. "

Huang Dezhong, a boss of a sound production enterprise in Guangdong, said that many small businesses felt that investing in brands was too big to play at all.

In fact, it is not.

In the German foreign trade industry, many small businesses with only a few dozen people in their hands hold high quality brands in the world.

Our small businesses are more willing to work hard and win more orders with high returns.

Last year, the company launched an independent R & D, its own brand of wireless audio equipment, the profit is more than ten times higher than the foundry.

Beijing soft power information technology (Group) Co., Ltd. focuses on smart city and industrial Internet, providing information technology outsourcing services.

"Spell prices before, spell technology in the future."

Liu Tianwen, chairman of the board of directors, said that the development opportunities of China's service outsourcing were more about the pfer of international service outsourcing business to China under the cost advantage.

In the future, China's service outsourcing enterprises will rely on technological advantages to move towards high-end industries, such as aiming at consulting and industry solutions.

How to highlight tight encirclement?

Facing the emerging countries' low-cost and developed countries' strong brands, improving supply can win international orders, meet and even create more new demand for foreign trade.

"The equipment that our industry has produced has been used by the whole world for several years!" Han Dong, the head of an oil exploration equipment production enterprise in Hebei, told reporters that "excess" has become a problem that plagued the industry.

Han Dong engaged in petroleum exploration equipment export work 10 years ago. He had his own factory in the past few years.

At that time, the market was good, and the factories were making money. Five people and eight townships built the same factories.

"These enterprises are beginning to make money, but many bosses simply don't understand why they can make money."

Han Dong said that most of the companies in flock belong to the order oriented production model, with the price advantage to take orders, and do not understand the situation in the foreign market.

"The tide retreat knows who nude swimming", when the international demand from flourishing to decline, basically no resistance.

From 1979 to 2012, China's exports of goods maintained an annual average growth rate of about 20%, thanks to the strong demand of the international market.

Now, when foreign demand is low, how can foreign trade enterprises highlight the low cost and tight encirclement of strong brands in developed countries?

"Foreign trade enterprises may wish to have more supply side thinking."

Li Guanghui said that the international demand cake is limited, and the foreign trade enterprises on the supply side want to have more than one piece, so they must rely on competitiveness.

Only by improving supply can we win the favor of the international market, satisfy or even create more new demands, and promote China's leap in the global industrial chain.

Reporters found in the survey, foreign trade enterprises have obvious differentiation phenomenon, "ice and fire double days": some enterprises do not know where to go, how to go, or wait for the government relief to run reluctantly, or to wait for their own lives to run away, and some enterprises through the improvement of supply to achieve the trend of growth, in the overall winter of foreign trade in the scenery alone.

Developing new technologies, not running with runners.

"Our equipment is not afraid to compare with foreign countries."

In Beijing Tongfang Weishi technology Limited by Share Ltd's equipment manufacturing workshop, Li Zhijun, vice president of the company, pointed to a new type of CT baggage safety inspection equipment.

Tongfang Wei regards innovation as its foothold. It has 6 "world first", including the first mobile container inspection system in the world, and has led to the drafting of 1 international standards and 3 national standards.

Relying on these powerful "fist", Tongfang Weishi worked hard to win the competition of all countries, and frequently won the bid at a price higher than that of foreign counterparts.

In bidding for Rio Olympic security inspection equipment, Wei has already won two projects.

In 2015, Tongfang's revenue reached a record high of 3 billion 400 million yuan.

Among them, foreign trade income was 156 million US dollars, up 98.5% over the same period last year.

- explore new models, small changes have great energy.

"Private customization" is very different from line production, while the red collar group of Qingdao garment enterprises can be tailored to consumers around the world.

In a factory bus equipped with volume space, consumers only need to change to a disposable tights, stand to the location of LED lights, maintain the standard stance for one or two seconds, and the 22 parts of the 19 parts will be grabbed.

The data then went on to the next process to produce the most fitting suit.

From substituting garments to tailored garments, a small innovation in business mode has brought about disruptive changes to Qingdao's red collar business.

Last year, red collar Internet clothing custom business volume, sales revenue and profit growth exceeded 100%, while more than 70% custom clothing orders from Europe and the United States.

To tap new demands and small businesses to win flexibly.

Qingdao three chain lock industry was established in 2003. From the initial 3 people to 3 years later, it was awarded the title of "China's export commodity lock brand enterprise" which ranked first in the Ministry of Commerce, and doubled in five to 5 years from 2004 to 2008.

After 2009, the annual export growth rate remained above 20%.

Wang Yuhui, the chairman of the company, blurted out "flexibility" when he summed up his experience.

"Big enterprises have the characteristics of large enterprises, and small businesses have the tricks of small businesses."

Wang Yuhui said that the small businesses in China's foreign trade account for the overwhelming majority. Many small businesses do not live well because they have not learned the innovation of large enterprises, have no brand premium capability, and have not taken advantage of the flexibility of small businesses.

The three chain is different: instead of waiting for orders at home, we need to go all over the world to find demand.

Last year, they found that the market potential of electronic locks in the United States was very high, and then an electronic lock was launched. The order has been released in September this year.

Foreign trade enterprises generally believe that a more perfect environment is needed to foster new competitive advantages.

The benefits of environmental improvement should not be underestimated.

Dongguan, the largest trading city in the world, launched the "three mutual" customs clearance system in April last year, reducing the customs clearance from the original 10 to 5. This reform saved about 13000000 yuan customs clearance fees for Guangdong Sinop shipping agency company in one year.

Zhao Qingming believes that in the face of new changes in external demand, China

We have the ability to gain new competitive advantages through improving supply, push forward the pformation of new and old kinetic energy in foreign trade, and achieve stable returns as soon as possible.