China’s “free trade circle of friends” expands, and another country joins the group!
The outbreak of the new coronavirus pneumonia epidemic has put globalization under test. However, these have not affected China’s promotion of free trade. pace of.
According to the latest report from China News Network, on October 12, China and Cambodia will officially sign the first bilateral free trade agreement. In the next step, China and Cambodia will fully launch the “fast lane” for personnel exchanges and the “green lane” for logistics between the two countries to further strengthen cooperation in the fields of economy and trade.
According to the agreement, China will include Cambodia’s key products such as clothing, footwear, leather and rubber products, mechanical and electrical parts, and agricultural products into tariff concessions. Cambodia has included textile materials and products, mechanical and electrical products, miscellaneous products, metal products, transportation vehicles and other products that China is focusing on into tariff concessions.
Will the China-Cambodia Free Trade Zone intensify the outflow of the textile industry?
“Almost every day in China, foreign trade orders from some industries and places are transferred to other countries and markets for production.” Li Xingqian, Director of the Foreign Trade Department of the Ministry of Commerce, pointed out that the transfer of orders and industries It is a spontaneous market behavior.
In recent years, China’s textile industry has also seen a large number of order transfers. The “Made in China” that everyone was familiar with in the past is unknowingly changing into “Made in Vietnam”, “Made in Cambodia”, etc.
Li Xingqian said that foreign trade competition for labor-intensive products is ultimately cost competition. In the past, China had great advantages in labor-intensive products, but now China’s land, The cost of labor and other factors is rising rapidly. It is unrealistic to keep the production capacity of these labor-intensive industries in the country.
The textile industry is Cambodia’s largest industry, currently employing about 750,000 people, accounting for 16% of Cambodia’s GDP and 80% of export revenue. Will this intensify the transfer of China’s textile industry to Southeast Asian countries such as Cambodia?
Li Xingqian believes that in fact, the impact of free trade zones on this kind of transfer is limited. The transfer of industries is the optimization of industrial layout made by multinational companies based on the endowment costs of various places. This is an all-time problem. Not in the process of dynamic adjustment, many of China’s production capacities are also making this kind of international market layout. The shift of some production capacity to Southeast Asia is a continuation of this international layout and will not be interrupted by the epidemic or other factors.
On the other hand, even if part of China’s production capacity has been transferred out, the companies’ technologies in raw materials, fabrics, etc. will still remain in the country, and each other’s industrial and supply chains are safe. , and there is a lot of cooperation. For China, this is also a natural process of industrial upgrading.
China’s foreign trade is better than expected but the situation is still grim
China’s foreign trade The total import and export value has now resumed growth. According to official data, the total import and export value of China’s goods trade in the first three quarters reached 23.12 trillion yuan, a year-on-year increase of 0.7%; exports were 12.71 trillion yuan, an increase of 1.8%.
The stabilization and improvement of foreign trade has provided strong support for the Chinese economy. From January to August, China had 478,000 companies with import and export performance, a year-on-year increase of 6.2%; foreign trade has driven 180 million jobs, and import tax revenue contributed 10.4% of the country’s total tax revenue.
According to World Trade Organization data, China’s export growth rate in the first half of this year was 7.8 percentage points higher than the global average, and its international market share increased by 1% compared with the same period last year. More than 10%, a record high for the same period in history.
The recent return of foreign trade orders has also been relatively obvious. Before the National Day, there was market news that a large number of orders that originally needed to be completed in India were returned to India. Some textile companies gave up the National Day holiday and began to rush for export orders.
It is not without reason that foreign trade orders return to China. Compared with China, the textile industries in countries such as Southeast Asia and India basically do not have a complete industrial chain, so they often only undertake certain steps in the entire manufacturing process. However, under the epidemic, the normal social order in some countries has been disrupted to a certain extent. On the one hand, the risks have increased, and on the other hand, the costs have also increased. Therefore, even if the price in China is relatively high, the quality is reliable and the risk is low, which is good for customers. The appeal is also greater.
As for the current emergency orders returning to India, domestic textile companies should not expect all their inventories. After all, the global epidemic is still rampant, and the epidemic has rebounded in many countries around the world, many of which are As an important trading partner of China, the further spread of the epidemic will cause the international market demand to continue to shrink, the global industrial and supply chains will be blocked, uncertain and unstable factors will increase significantly, and the situation facing China’s foreign trade will still be complex and severe.
Instead of pinning our hopes on the foreign trade market, it is better to focus on the current domestic market. Double Eleven, Double Twelve, Christmas, etc. are the last wave of large-scale promotions before the year, which is a good time to clear inventory. Concentrate your firepower and shorten the time to destock. Of course, we must be wary of the risk of inventory being too high again after the peak season. Once e-commerce promotions end and the Chinese New Year is approaching, the market may fall back.
</p
