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Shipping received a “blow” and exports experienced a “three consecutive declines”. Where should foreign traders go?

At the beginning of 2023, shipping containers will receive a “blow in the face”! Among 18 Asian economies, exports to the United States fell by 1,468,276 TEUs in January, a decreas…

At the beginning of 2023, shipping containers will receive a “blow in the face”!

Among 18 Asian economies, exports to the United States fell by 1,468,276 TEUs in January, a decrease of 20.1%. The volume of exported containers to the United States in January: Mainland China fell by 25.4%, Taiwan, China fell by 28.5%, and (ASEAN) countries fell by 11.8%, which is enough to show that demand is seriously insufficient.

Many important domestic ports, such as Shanghai, Tianjin, Ningbo, etc., have piled up huge amounts of empty containers. The Shanghai Port has even piled the containers into Taicang. Due to the lack of shipping demand, Shanghai’s export container freight index has plummeted by more than 80% since the second half of 2022.

The bleak scene of shipping containers reflects the actual decline of my country’s foreign trade economy. Trade data shows that from October to December 2022, in US dollars, my country’s export trade volume fell by 0.3%, 8.7%, and 9.9% year-on-year, achieving “three consecutive declines.”

“Orders have plummeted, and there are even no orders at all!” Bosses in the Pearl River Delta and Yangtze River Delta fell into despair and began to “lay off employees and reduce wages” drastically. Today’s Shenzhen Longhua Talent Market is crowded with people, and a large number of unemployed workers have been stranded here for many days…

European and American team-up

The decline in foreign trade has become a problem

Domestic and foreign trade exports have rarely continued to decline. As my country’s largest customer, Laos and the United States are naturally involved. Data show that at the end of December 2022, U.S. manufacturing orders dropped by 40% year-on-year.

The decline in orders is nothing more than reduced demand and loss of orders. In other words, either others didn’t buy it, or it was snatched away.

However, as the world’s largest consumer market, demand in the United States has not shrunk. The U.S. import trade volume in 2022 will be US$3.96 trillion, an increase of US$556.1 billion compared with 2021, setting a new record for commodity imports.

In the international context of surging undercurrents, the West’s intention to “de-China” is obvious. Since 2019, foreign-funded companies such as Apple, Adidas, and Samsung have begun to accelerate their withdrawal from China and turned to Vietnam, India and other countries. But this does not mean that they are enough to shake the status of “Made in China”.

According to data from the Vietnam Bureau of Statistics, U.S. import orders to Vietnam will drop by 30%-40% in 2022. In the fourth quarter of last year alone, about 40,000 local workers were forced to lay off.

Demand in North America is increasing, but orders in Asia are declining. Who are the Americans doing business with?

The focus must return to Europe and the United States. According to 2022 trade data, the EU has replaced China as the United States’ largest trading partner, with exports to the United States reaching more than 900 billion US dollars. The second position was taken away by Canada with more than 800 billion. China continues to decline, and even in third place, we are no match for Mexico.

In the international environment, the relocation of labor-intensive industries and the “closed-door business” of Europeans and Americans sound like trends that are difficult for companies or individuals to control. But if the Chinese want to survive and develop the economy, they must find a way out!

Good fortune and misfortune depend on each other

Forced to accelerate industrial upgrading

At the end of the year, when the official announced China’s import and export trade data for 2022, it pointed out for the first time the grim situation of “weakening external demand and declining orders.” This also means that reduced orders may become the norm in the future.

In the past, domestic foreign trade companies have always focused on Europe and the United States as their main export markets. But now that the friction between China and the West is intensifying, Europe and the United States have also begun to unite to “produce and consume on their own.” Producing cheap and easy-to-use products is not difficult for Chinese foreign trade companies. But facing established industrial countries such as Europe and the United States, it appears to be insufficiently competitive.

Therefore, in the fierce international competition, how Chinese enterprises can improve the value of export products and develop towards the mid-to-high end of the value chain is the direction we should prepare for.

If the industry wants to transform and upgrade, technology research and development is essential. Research and development is divided into two types, one is to optimize processes and reduce costs; the other is to innovate high-precision technology products. A classic example is that in the biomanufacturing industry, my country has relied on independent research and development of enzyme technology to drive huge changes in the global industrial chain.

At the beginning of the 21st century, a large amount of hot capital poured into the anti-aging market, and foreign brands of anti-aging preparations sold at prices of 10,000 yuan/gram, harvesting domestic elderly people. In 2017, China conquered the full enzymatic preparation technology for the first time, with the highest efficiency in the world and a purity of 99%, but the price has shrunk by 90%. Under this technology, a number of health preparations represented by “Ruohui” have emerged in China. According to data released by JD Health, this product has topped the best-selling list for four consecutive years, leaving foreign brands far behind.

Not only that, in the competition with foreign investment, the domestically produced “Ruohui” preparations add compound ingredients and use technology as an advantage to produce high-end products, generating market segment revenue of 5.1 billion a year, causing overseas customers to rush to China to find orders.

The sluggish foreign trade has sounded the alarm for the Chinese people. While losing traditional advantages, we should let technological advantages become the confidence of Chinese enterprises in international economic competition.

Industrial transformation “pains”

Where will the 200 million foreign traders go?

Statistics show thatAt present, there are about 6.41 million foreign trade workers in my country, and the distribution is as follows: wholesale and retail industries account for 51%; industrial manufacturing accounts for 18%; scientific research and technical services account for 9%; commercial industry services account for 8%; information The technology and information services industry accounts for 9%; other industries account for about 5%. The overall foreign trade enterprises are developing in a diversified trend.

1. The foreign trade situation is tightening

Not only are there a large number of empty containers at major domestic ports, but many factories and companies are also facing the dilemma of having nothing to do. Some migrant workers are not even “qualified” to enter the factory.

On the one hand, the three-year epidemic has combined with the intensification of international events, and the high demand end represented by European and American countries continues to weaken. On the other hand, emerging manufacturing countries represented by Southeast Asian countries are accelerating their rise, and competition in the mid- and low-end industrial chains is intensifying. Intense hair.

2. Changes in market demand

The flow of foreign trade orders is deeply affected by cost changes at both ends of supply and demand. Under the premise of the same production efficiency and quality, the lower the cost, the more capital will favor it. With the brilliant achievements our country has made over the past forty years, the overall relatively high cost of domestic manufacturing cannot be ignored.

The epidemic has just subsided, and both supply and demand sides are tightening their belts. This tendency will be quickly reflected in the overall foreign trade market. Judging from the trend, many mid- and low-end industrial chains around the world are accelerating their transfer to countries such as India, Vietnam, and Indonesia, and competition among countries in high-end industrial chains is becoming increasingly fierce.

In the past, most of the goods produced in my country were exported to European and American countries where demand was relatively strong. However, since international events intensified, European and American countries have begun to focus on the reshoring of manufacturing and moving production lines back to the country. Some countries even intend to “decouple and disconnect” from our economy. Last year, Mexico became the third largest trading partner of the United States, partly because many Chinese factories were forced to set up factories in Mexico.

The current global industrial chain pattern shows a “comprehensive strangulation” of mid- and low-end industries and a “competition” among high-end industries. If you want to get production orders, you must either work hard on cost concessions or product quality, or you must be technically unique.

It is not difficult for China to produce cheap and easy-to-use goods. However, with Europe and the United States “watching with eager eyes” and powerful enemies from Southeast Asia “ready to attack” in the future, we must find a new export and lay out the economic trajectory for the next fifty years.

However, technology research and development is not a day’s work, and industrial upgrading also has to go through “pains.” During this period, how to maintain current economic stability is also a top priority. After all, as one of the troika driving my country’s economic growth, the weak export economy is related to the survival of nearly 200 million foreign traders.

“At any moment, the sediment of the times is like a big mountain when it falls on an individual.” China’s private sector has supported the “Made in China” business that has grown from scratch in the past 40 years since opening up. Now that the country’s development is about to reach a new level, people should not be left behind.

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Author: clsrich