Whether it is good or bad, at least the following factors affect the foreign trade industry in 2018: First, the United States imposes tariffs on Chinese goods from verbal to reality, and turns into a battle, the adverse effects will appear one after another; The profit margin is squeezed; the third is the large fluctuation of the exchange rate, the risk of default by overseas traders increases; the fourth is that the Internet impacts the real economy, and the innovation and upgrading are deep but not easy; the fifth is the “One Belt, One Road” initiative, more trading partners. Participate in and reshape the new foreign trade pattern; sixth, the international situation has entered a new round of turbulent cycles. For example, the US has restarted economic sanctions against Iran, the political situation in Africa has increased, and some emerging economies have depreciated their currencies...
Among these complicated factors, the United States has undoubtedly played the role of "the protagonist." In the past few decades, despite the impact of serious events such as the financial crisis, international trade has generally moved in the direction of “globalization” and trade rules have gradually “liberalized”. Now, this kind of sturdy game and the stable trade pattern created by the efforts for many years have been broken. Undoubtedly, the United States is the chief culprit. From the leader of free trade to the opponents of today, the United States has a brand of “hegemony”. US President Trump put forward "US priority", and it is necessary to get back the trade interests that should belong to the United States, so that trade barriers will suddenly increase and China's trade will be deeply affected.
However, in this context, China's trade import and export still maintains a "stable and good momentum." According to the statistics of the General Administration of Customs, in the first seven months of 2018, China’s import and export volume was 16.72 trillion yuan, a year-on-year increase of 8.6%. Among them, the export value was 8.89 trillion yuan, a year-on-year increase of 5%; the import value was 7.83 trillion yuan, a year-on-year increase of 12.9%.
According to the survey conducted by our magazine in previous years, the foreign trade industry is under great pressure in 2016, and 2017 is a key year for the recovery of foreign trade enterprises' confidence. In the same year, the volume of foreign trade exports and imports changed from “double down” to “double rise”. Enthusiasm is high. In the first seven months of 2018, China's foreign trade import and export continued the good situation in 2017. And as the United States gradually implements tariffs on Chinese goods, can this good situation be maintained? We may be able to see one or two from this foreign trade enterprise survey.
The survey report was jointly initiated and completed by the "Import and Export Manager" magazine and the TÜV Rheinland Group. It is also the seventh time to publish this report.
From the survey results, foreign trade companies generally pay more attention to the risk of trade friction, the pressure of rising costs continues to accumulate, and the risk of exchange rate turmoil increases significantly; compared with the results of the previous year's survey, companies are more cautious about export expectations; For the international market risks, foreign trade enterprises have found their own pain points, and more measures have been taken to enhance endogenous power and release positive signals of in-depth innovation and upgrading.
The "Report on the Survival Status of Foreign Trade Enterprises in 2018" presents you with the true status quo of foreign trade enterprises in the current complicated and volatile international trade market.
Survey sample description
The survey received a total of 1231 foreign trade export enterprises. In terms of industries, the electromechanical industry accounted for the most, accounting for 39.2%; followed by the light industry enterprises accounting for 25.2%, the Minmetals chemical industry enterprises accounting for 10.8%, the textile and garment industry enterprises accounting for 9.5%, the food and livestock industry enterprises accounting for 4.5%, medical insurance Industry companies accounted for 4.1%, and other industry companies accounted for 6.8% .
In the survey over the years, the proportion of production-oriented enterprises remained basically stable. In this survey, the production-oriented enterprises still accounted for the most, with a ratio of 55.4%; the proportion of service-oriented enterprises and circulation-type enterprises was the same as in 2017, accounting for 23.8% and 17.3%.
▶ The biggest factor affecting exports: cost rises once again, exchange rate fluctuations and trade frictions move forward
In the past years, “the weakening of international market demand, the reduction of orders”, “cost increase” and “insufficient innovation and research and development capabilities” have been the top three factors affecting corporate exports. Until 2017, “cost increase” exceeded “the international market demand weakened, The reduction in orders has become the biggest factor affecting exports, but the top three are still the above.
In the 2018 survey, the top two did not change, and the “cost increase” reached the top again. “The international market demand weakened and orders decreased” and it stood firm in the second place. In the turbulent environment of the international market, the cost factor seems to have been ignored by us, or its "light" is concealed by the complicated international factors that are constantly emerging. In fact, the increase in labor costs and fluctuations in raw material prices have severely reduced the profit margin of enterprises and must be taken seriously.
It is worth noting that the “exchange rate fluctuation” factor has launched an impact on the top three, and successfully pulled down the “innovation and research and development capacity” factor from the old position and reached the throne of the third place. In fact, the ranking of “exchange rate fluctuations” has been quietly moving forward in the past few years. In 2016, it ranked fifth, and moved to the fourth place before 2017. In this survey, it moved forward one more. The change in ranking reflects the reality of the exacerbation of exchange rate volatility, and companies are becoming more and more at a loss. In 2018, exchange rates in several emerging markets such as Turkey, Brazil and Russia were in turmoil, and the RMB exchange rate also experienced a process of depreciation, which will affect the stability of corporate exports.
Another thing that needs special attention is that “trade barriers and trade frictions are intensifying”, a factor that was not eye-catching in previous years, was highlighted in the 2018 survey, moving from the 8th in 2017 to the 5th . This is obviously closely related to the United States to impose tariffs and “de-globalization”. Enterprises have actually felt the heavy pressure brought by trade frictions. The impact of this factor is expected to be further exposed in the second half of 2018 and beyond.
▶ Distribution of the regions with the most exports: the EU surpassed the United States to take the lead, and the “One Belt, One Road” sustained release potential
Judging from the results of many years of investigations, the United States, the European Union and ASEAN have always been the three regions where China’s foreign trade enterprises have chosen to export the most. The United States and the European Union have been chasing each other and have been “occupied” the top two, sometimes the United States ranked first. Sometimes the EU wins the crown. In this survey, the EU surpassed the United States to become the region where Chinese companies choose to export the most.
The United States has provoked a "trade war" as a major variable in China's foreign trade exports in 2018. As of August 23, the United States has imposed tariffs on Chinese goods valued at about $50 billion. Despite this, the latest data from the General Administration of Customs shows that in the first seven months of 2018, China’s import and export trade with the United States reached 2.29 trillion yuan, a year-on-year increase of 5.2%, and China’s trade surplus with the United States was 1.03 trillion yuan.
As the traditional market trade barriers continue to increase, China's foreign trade enterprises have increased their motivation to find new opportunities along the “Belt and Road”. According to the survey, the number of companies in the Middle East, Eastern Europe and other markets is increasing. The Middle East ranks fourth after ASEAN, indicating the strong willingness of enterprises to export to the region. According to the data of the General Administration of Customs, in the first seven months of 2018, the import and export volume of China and the countries and regions along the “Belt and Road” reached 4.57 trillion yuan, a year-on-year increase of 11.3%, and the growth rate was higher than the overall growth rate of China's foreign trade in the same period of 2.7. The percentage point has become a new driving force for China's foreign trade development.
▶ Enterprises are pessimistic about North American and Latin American markets, and their export confidence in other markets is basically stable
In the survey of the expected export market, the comparison of the survey results in the past three years shows that the companies are cautiously optimistic about the EU, other European markets, Japan, South Korea, Africa, ASEAN and other Asian markets, and the proportion of “decline” is reduced. Compared with 2017, the proportion of enterprises that have “flat” to these market choices has risen, and the proportion of “growth” has become more differentiated, which is more optimistic about the EU, Japan and South Korea markets. Compared with 2017, the surveyed companies are more pessimistic about the North American market and the Latin American market. The proportion of “declined” has all increased, the proportion of “flat” has increased, and the proportion of “growth” has declined. Overall, the “flat” item accounts for the highest proportion of all markets.
▶ Export expectations in 2018: Double “rise” highlights corporate optimism
In the “Investment Scale and Profits of Enterprises in the Past Years” survey, from the results of three consecutive years of surveys, when the export was low in 2016, the companies with the “declining scale and falling profits” were selected, and the export confidence in 2017 was restored. The proportion of companies that choose “increasing scale and rising profits” is the highest. The survey reappeared in 2016, with the highest proportion of “declining down and falling profits”, which was 22.8%, followed by “increased scale, rising profits” and “flat scale and flat profit”. It can be seen that in the past year, the export situation of enterprises has generally deteriorated, which is related to the turmoil in the global trade situation. However, the proportion of “increasing scale and rising profits” is not small, indicating that some enterprises have been smoothly transformed and upgraded, and the cultivation of the international market is relatively solid, and the evasion of trade risks is more effective. A company with strong strength can sail smoothly in the rough winds.
Fortunately, in the 2018 export expectation survey, companies chose the highest proportion of “increasing scale and rising profits”, which was 33.8%, which was the same as 2017. It can be seen that although the current trade frictions, tariff barriers and local regional turmoil have caused foreign trade enterprises to be very annoyed, there are not many enterprises that are full of confidence in the export situation in the next year.
▶ The main way to open up the international market: participation is still the first choice, and the proportion of e-commerce continues to expand.
Judging from the results of many years of investigations, the status of “participating in exhibitions” in the main ways for foreign trade enterprises to explore overseas markets has not been shaken. The proportion of this selection is 37.5%, which is 2.5 percentage points higher than that of 2017 and has been improved for two consecutive years. Unsurprisingly, under the new format of “Internet + Foreign Trade”, the proportion of “e-commerce platform” in the survey has risen again. The enterprises that selected the “e-commerce platform” accounted for 30.6%, which was 1.2 percentage points higher than that in 2017. In addition, the proportions of the two traditional methods of “relying on large foreign distributors” and “outside marketing networks” were 16.5% and 12.9% respectively, while the proportion of “others” was down to 2.5%. The ranking of these four main methods is the same as that of previous years.
▶ Pay attention to quality and technology, and reduce cost pressure from the inside out
Judging from the results of many years of investigation, the way in which enterprises can resolve cost pressures has basically remained unchanged. The top three have been “adjusting product structure”, “technical transformation” and “strengthening management”. The same is true for this survey, which accounted for 21.1%, 18.5%, and 14.7%, respectively.
Under the explicit support of national policies and market pressure, in recent years, enterprises have started from the inside, actively innovated and upgraded, adjusted product structure, increased investment and improved technical level, in response to the different levels of demand in overseas markets and increasingly fierce Competition situation. From the feedback of enterprises, with the improvement of China's product quality and the continuous advancement of technology, the resistance encountered in the international market has become increasingly larger. This is because Chinese enterprises have moved from the low end of the supply chain to the middle and high end, which means entering the core competition area of the international market. The impact has a competitive landscape, and competition with the traditional markets such as Europe, the United States, and Japan will inevitably lead to their resistance. But in the long run, this will only make Chinese enterprises pay more attention to quality and technology, and adjust internal management methods to be in line with the international market.
Compared with 2017, this time, “negotiating overseas buyers through negotiation” and “downgrading prices to upstream enterprises” are still ranked 4th and 5th respectively; “industrial transformation” accounts for 8.5%, higher than the previous year. 1.6 percentage points, ranking one position forward, it can be seen that the enterprise transformation and upgrading action is further enhanced; the reduction of exports and the expansion of domestic sales accounted for 7.8%, ranking 7th. In addition, the proportion of layoffs and pay cuts was 3.5%, which was only 0.1 percentage points higher than that in 2017; the proportion of foreign investment choices dropped from 4.9% in the previous year to 1.9%.
▶ Foreign trade new business grows vigorously, cross-border e-commerce quickly becomes a new carrier for foreign trade export
As a new foreign trade business, the current cross-border e-commerce is still in a period of rapid development. Among China's huge export volume, although cross-border e-commerce currently only accounts for a small share, it is a booming emerging industry and perhaps a brand name for China's foreign trade. This can be seen from the relevant national support policies: At present, 13 cross-border e-commerce comprehensive experimental zones have been established in China, and another 22 pilot zones have been approved in July 2018.
In recent years, the impact of traditional foreign trade enterprises has come from the international market turmoil, manufacturing intelligence and other aspects, but also from the new channel of cross-border e-commerce platform. After all, the integration of tradition and innovation requires a process. Fortunately, enterprises have generally accepted the existence of this new format. Some companies have even begun to use third-party platforms or self-built platforms to achieve exports.
According to the survey, the proportion of cross-border e-commerce options has been 48.5%. This is the third consecutive year since the project was added to the survey in 2016. The selection ratios in 2016 and 2017 are 37.3% and 44.3 respectively. %. Among the third-party cross-border e-commerce platforms, foreign trade companies have the highest percentage of Alibaba, 57.9%; followed by eBay, China Manufacturing Network, AliExpress, Amazon, Global Tradelink, Global Sources and Facebook, respectively. 9.5%, 6.3%, 5.3%, 4.2%, 4.2%, 3.2%, 1.1%; the ratio of selecting "others" is 8.4%
▶ Create your own brand is unstoppable and increase your participation in the high-end competition in the supply chain.
The more you go to the high end of the supply chain, the more important it will be to discover the brand. In the past, “Made in China” was still very dynamic and competitive even at the low end of the supply chain, thanks to the demographic dividend and developed processing trade. But now, the demographic dividend has disappeared. The development and accumulation of foreign trade for many years tells us that we cannot stay in the era of serious dependence on processing trade. Not only that, over the years, foreign trade companies have become more familiar with the overseas market environment and rules, and accumulated more and more experience, and international competition has naturally entered a higher level. At this time, the value of independent brands in the competition is reflected.
From the results of the five-year survey from 2014 to 2018, the proportion of companies with independent brands has been increasing, 40%, 45%, 47%, 48% and 51% respectively (see Figure 11). The results of this survey mean that companies with their own brands have occupied half of the country, and this trend is expected to continue to expand.
In the survey item of “the proportion of private brands in export volume”, the enterprises with their own brands accounting for more than 50% of exports accounted for the most, reaching 40.5%; the proportion of self-owned brands in export was 10% to 50% (including The proportion of enterprises between the companies is 39.2%; the enterprises with private brands accounting for less than 10% of exports account for only 20.3%.
▶ To prevent export risks, companies urgently need more overseas market information
This survey shows that in addition to “strengthening external publicity and establishing a Chinese image”, it has moved to the fourth place before “tariff adjustment”, and the other items are ranked the same as 2017. The most hoped support for foreign trade enterprises is still to provide more information on overseas markets, followed by improving the financing environment of foreign trade enterprises and providing export credit insurance, accounting for 25.7%, 19.4% and 18.5% respectively. At a time when the risk in overseas markets is increasing, companies urgently need to obtain first-hand information on market changes, supplemented by effective risk aversion.
It seems that from the beginning of the global financial crisis in 2008, China's foreign trade has entered an eventful autumn. In the past 10 years, foreign trade has experienced the pain of import and export “double down”. It has experienced a difficult period of slow climb, experienced the harsh winter of trade frictions, experienced the low tide of weakening international market demand, and experienced the new competitive advantage. The chaotic period has experienced the impact of new technologies and new business formats. Of course, it has also encountered a rare opportunity period like the “Belt and Road”.
Just like people, experience is wealth, and it is the reinforcement of the soul. Through the wolf smoke of the years, we will eventually be completely new and invincible. After 10 years of ups and downs, the endogenous power of foreign trade is stronger, the new competitive advantage is beginning to show off, and foreign traders are embracing the new stage of trade with a firmer heart!
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