The market is no longer “hard to find a box” but is faced with the dilemma of “few orders”. Previously, some foreign trade companies reported that they were facing problems such as rising shipping rates and shortages of containers. In this regard, the China Council for the Promotion of International Trade spoke out.
The shipping market is no longer “hard to find a box”
CCTV News: The China Council for the Promotion of International Trade stated at a recent press conference that according to reports from enterprises, freight rates on some popular routes have dropped, and it is no longer “hard to find a container” in the container shipping market.
A recent questionnaire survey conducted by the China Council for the Promotion of International Trade among more than 500 companies showed that the main difficulties companies currently face are slow logistics, high costs and few orders.
56% of companies said that raw material prices and logistics costs are high. For example, although shipping rates have fallen in the short term, they are still at medium to long-term highs;
62.5% of companies said that orders are unstable, with more short-term and small orders and less long-term and large orders. The demands of enterprises mainly focus on maintaining the stability and smooth flow of international and domestic logistics, implementing relief and assistance policies, and facilitating cross-border personnel exchanges. Some companies are looking forward to resuming domestic exhibitions and liberalizing overseas participation in order to obtain more orders.
China Council for the Promotion of International Trade Spokesperson Sun Xiao: During the survey, we also noticed some positive factors. In the past three months, with the effective control of the domestic epidemic, especially the accelerated implementation of the national “package” policy to stabilize the economy, foreign trade imports and exports have stabilized and rebounded, and business expectations and confidence are gradually improving.
Recently, the Council for the Promotion of International Trade has also taken a series of measures to stabilize foreign trade. Support enterprises to participate in overseas exhibitions through “representative exhibitions” and other methods, and help enterprises to “secure and increase orders.” Provide diversified international commercial legal services to enterprises to help them prevent risks and stabilize the market.
Sun Xiao, spokesperson of the China Council for the Promotion of International Trade: In the first seven months of this year, 906 factual certificates of force majeure due to the COVID-19 epidemic were issued to 426 companies, guiding companies to reduce or reduce liability for breach of contract in accordance with the law, involving an amount of US$3.653 billion, effectively helping companies to stabilize customers, Keep your order.
Low orders become a major difficulty for enterprises
According to the results of a questionnaire conducted by the China Council for the Promotion of International Trade, the vast majority of companies believe that they are currently facing the difficulty of low orders!
Data released by the National Bureau of Statistics on Wednesday showed that China’s manufacturing purchasing managers’ index (PMI) rose 0.4 percentage points from the previous month to 49.4% in August, but it was still below the boom-bust line.
The manufacturing PMI in August was in line with market expectations. A PMI index above 50% reflects the overall expansion of the economy; a PMI index below 50% reflects a contraction in economic activity.
Xu Tianchen, an analyst at the Economist Intelligence Unit, said that in addition to weather factors, there are two other reasons that caused the manufacturing PMI to continue to hover below the boom-bust line in August. First, real estate is in a weak position in both construction and sales, dragging down related upstream and downstream industries; second, the epidemic spread from tourist destinations to some industrial provinces in August, which is also one of the reasons for affecting manufacturing activities.
“On the whole, in the face of adverse factors such as the epidemic and high temperatures, all regions and departments have conscientiously implemented the decisions and arrangements of the Party Central Committee and the State Council, and enterprises have actively responded, and my country’s economy continues to maintain a recovery and development trend.” Senior Senior Director of the Service Industry Survey Center of the National Bureau of Statistics Statistician Zhao Qinghe pointed out.
Zhao Qinghe said that in August, the production index was 49.8%, the same as the previous month, and the new orders index was 49.2%, 0.7 percentage points higher than the previous month. Both indices continued to be in the contraction range, indicating that the recovery of manufacturing production demand still needs to strengthen. However, this month, the proportion of companies reporting high raw material costs was 48.4%, a decrease of 2.4 percentage points from the previous month, and it was lower than 50.0% for the first time this year. The cost pressure on companies has eased.
Xu Tianchen said that as the high temperature eases and the balance between power supply and demand is good for production recovery, the manufacturing PMI may rebound slightly in September. However, overseas replenishment is coming to an end. In particular, industries that are strongly related to China’s exports, such as real estate and electronics, have shown decline. The decline in external demand will drag down the PMI in the fourth quarter. It is expected that the PMI will most likely be below the boom-bust line!