How to stabilize orders and expand markets in foreign trade—— Mid year Economic Research Tour - Foreign Trade Chapter, Global Market Demand Weak YoY | China | Orders

Beijing, July 15th (Xinhua) - Global market demand is weak, how can foreign trade stabilize orders and expand the market—— Mid year Economic Research Tour - Foreign Trade Chapter

Xinhua News Agency reporter

The latest data from the General Administration of Customs shows that in the first half of the year, China's total import and export value of goods trade was 20.1 trillion yuan, a year-on-year increase of 2.1%. However, compared to the data from the first five months, the import and export growth rates in the first half of the year shrank by 2.6 and 4.4 percentage points, respectively.

While the scale of foreign trade has reached a new high, the growth rate of imports and exports has slowed down in the past two months, and the pressure behind it cannot be underestimated. The slowdown in global economic growth has led to multiple factors such as insufficient demand, posing significant challenges to the operation of foreign trade.

In this context, how can foreign trade stabilize orders and expand the market? The reporter recently visited coastal areas such as Jiangsu, Guangdong, and Hainan, and also delved into inland provinces such as Sichuan and Hunan to explore the development momentum and growth potential of foreign trade in multiple regions.

Going global to expand the market and stabilize scale

72 days of visiting 8 countries and regions, flying 236 hours - this is the business trip of Yang Nan, Chairman of Wuxi Jinmao Foreign Trade Co., Ltd., since the beginning of this year.

When the reporter contacted Yang Nan on the 10th, he had just flown to Dallas, USA. Dallas is a stop in this company's global supply chain layout. Wuxi Jinmao exports home clothing, pet textiles, and shirt fabrics to the world. The United States is its largest sales market, accounting for over 90% of the company's total sales.

"This year's orders have decreased compared to last year, and we are actively developing new customers, exploring new markets, and laying the foundation for next year." Yang Nan said over the phone that at the end of 2022, he led his team to visit 12 countries in 60 days, and implemented nearly $300 million in 2023 orders, accounting for about 75% of the company's total orders this year, stabilizing the business foundation.

"Weakening demand, rising costs, supply chain adjustments, and other complex factors are intertwined, putting considerable pressure on textile and clothing exports," said Yang Nan, who has been engaged in the textile industry for more than 30 years.

At present, the global economic recovery is weak, global trade and investment are slowing down, risks of unilateralism, protectionism, and geopolitics are rising, and the direct impact of weakened external demand on China's foreign trade is still ongoing. These are particularly evident in China's traditional manufacturing exports such as textiles and clothing.

In the first half of the year, China's exports of labor-intensive products reached 1.97 trillion yuan, an increase of 0.04%; Among them, the export of clothing and clothing accessories reached 516.94 billion yuan, an increase of 0.7%.

Yang Nan firmly believes that China's textile and clothing industry, with its complete supply chain and advanced technological advantages, continuously enhances its product innovation and sustainable development capabilities, and its development prospects are still promising.

Facing challenges head-on, actively going out, expanding the market, and stabilizing orders has become the consensus and norm of foreign trade enterprises.

"We cannot rely on our old ways at home. Only by actively going out can we have a market!" During an interview with reporters, Yuan Zhiyou, Chairman of Sichuan Jiayi Co., Ltd., was discussing orders in Kazakhstan.

This small and medium-sized enterprise located in Linshui County, Guang'an, Sichuan Province, produces motorcycles and mechanical and electrical products that are exported to overseas regions such as Southeast Asia and Africa. According to the latest changes in the market, Yuan Zhiyou has actively opened up new markets, and Kazakhstan is one of them.

This year, Yuan Zhiyou plans to build a new factory at Khorgos Port in Xinjiang to save transportation costs and better radiate the markets of the five Central Asian countries. "It is expected that the annual order volume will return to pre pandemic levels."

During the journalist's research, it was learned that both the government and enterprises have come up with practical measures and ways to connect the market and optimize industrial layout. This not only consolidates the advantages of traditional markets but also opens up space for emerging markets. More emphasis is placed on matching product advantages with market demand, based on stabilizing scale and optimizing structure to increase momentum.

In the first half of the year, there were 540000 foreign trade enterprises in China with import and export performance, an increase of 6.9% year-on-year. Among them, private enterprises continued to expand, an increase of 8.3% year-on-year; The import and export of private enterprises reached 10.59 trillion yuan, a year-on-year increase of 8.9%, accounting for 52.7% of the total import and export value, a year-on-year increase of 3.3 percentage points.

The spokesperson of the General Administration of Customs, Lv Daliang, said that China's foreign trade is currently facing pressure, fluctuations, and challenges, but the overall development is stable. It seems that it has slowed down a bit compared to the previous year, but it is still steadily moving forward step by step compared to the previous year.

New engine, new business model, and optimized structure

At present, the scene of domestic cars queuing up to go to sea is presented at major ports and docks.

At around 8:00 am on July 8th, the "COSCO Shengshi" ship successfully docked at Xiamen Yuanhai Container Terminal, embarking on the first voyage of the "China Europe" liner route. The voyage loaded a total of 3731 vehicles, including over 2700 new energy vehicles, heading to the UK, Belgium, and Germany in Europe.

As a new engine of foreign trade growth, the combined exports of electric passenger vehicles, lithium batteries, and solar cells, known as the "new three types", increased by 61.6%, driving an overall export growth of 1.8 percentage points.

Journalist research has found that in the context of weak global consumption, high-tech applied enterprises led by high-end, intelligent, and green industries still maintain a high level of export momentum.

Entering the Jizhijia Global R&D and Testing Center located in Chaoyang District, Beijing, logistics robots shuttle through the shelves in an orderly manner, automatically avoiding, lifting, arriving, queuing, and placing

According to on-site staff, this is the latest PopPick intelligent logistics solution from Jizhijia. Compared with manual warehouses, this robot solution can increase warehouse throughput efficiency by 5 times.

"Since the beginning of this year, the export volume and profit of Jizhijia logistics robots have not been significantly affected," said Zheng Yong, founder and CEO of Jizhijia. The logistics automation industry has a huge market space, and global market demand is still steadily increasing. The company's products and services have spread to more than 40 countries.

Relying on the changing circumstances, promoting technological innovation and industrial upgrading, and providing more competitive export products are the key to achieving stable growth in imports and exports. In the first half of the year, China's exports of mechanical and electrical products reached 6.66 trillion yuan, a year-on-year increase of 6.3%, accounting for 58.2% of the total export value, a year-on-year increase of 1.4 percentage points.

Yang Guangpu, Director of the Macro Economic Research Department of the Development Research Center of the State Council, said that the global demand for high-tech products and applications is still growing, and the position of Chinese manufacturing in the global value chain is constantly improving, with still significant room for growth.

New forms and models of foreign trade continue to emerge, playing an important role in expanding sales channels and enhancing brand reputation for enterprises.

Zhuang Xiaoqing, the person in charge of Fujian Yibicheng Clothing Technology Co., Ltd., told reporters that a down vest independently developed by the company, which can achieve independent temperature control by inserting a power bank, has been widely popular in overseas markets in recent years.

"We no longer rely on the traditional foreign trade model of overseas buyers placing orders in the past. With the support of cross-border e-commerce platforms, overseas consumers can directly place orders after seeing the goods, giving companies greater bargaining power and stronger brand influence."

In the first half of the year, the advantages and potential of cross-border e-commerce in "buying and selling globally" continued to be unleashed, with imports and exports reaching 1.1 trillion yuan, a year-on-year increase of 16%.

What impressed the reporter was that, unlike traditional live streaming sales, more and more foreign trade enterprises are leading overseas customers to "cloud view" production lines and research and development centers through cross-border live streaming, fully demonstrating brand strength.

"We will connect the factory operation images captured by robots to live streaming, and overseas customers can synchronously see the factory operation situation." said Luo Chang, founder of Shenzhen Shuoteng Technology Co., Ltd. The live streaming is mainly aimed at B-end enterprises, "selling not goods, but the production and manufacturing capabilities of the enterprise.".

Yang Guangpu said that new forms and models of foreign trade are conducive to faster gathering of high-quality production factors such as talents, technology, and brands, thereby expanding the development space of foreign trade enterprises.

More elements, more diversity, and more openness

On June 2nd, the Regional Comprehensive Economic Partnership Agreement officially came into effect for the Philippines, marking the full entry into force of RCEP for 15 signatory countries.

The reporter arrived at the RCEP Shandong Enterprise Service Center, where Qingdao Customs officer Hu Xiao was online accepting and issuing RCEP certificates of origin applied for by foreign trade enterprises. Hu Xiao said that in the first half of the year, Qingdao Customs issued 49000 RCEP certificates of origin, with an export value of 10.65 billion yuan, an increase of 55.53% and 20.3% year-on-year, respectively.

"With this certificate of origin, the 3% tariff rate for products exported to the Philippines in the past has been reduced to zero." Ma Wenbo, Chairman of Qingdao Langfu Technology Co., Ltd., said that benefiting from the RCEP tariff reduction, the company's trade costs have decreased, and it is expected that orders for exports to the Philippines will increase by about 10% year-on-year this year.

China and Singapore have announced the substantial completion of the follow-up negotiations for the upgrade of the free trade agreement, and the third round of negotiations for the 3.0 version of the China ASEAN Free Trade Area has been held... Since the beginning of this year, the free trade agreement has steadily advanced, and the "circle of friends" of the free trade area has become larger, bringing broad opportunities for China's foreign trade enterprises to explore diversified markets.

During the investigation, the reporter felt that the vast number of foreign trade entities actively responded to changes in international demand, with more diverse export markets, products, and business formats, striving to cultivate new competitive advantages and demonstrating strong resilience.

In the first half of the year, China's total imports and exports to the other 14 members of RCEP amounted to 6.1 trillion yuan, a year-on-year increase of 1.5%, contributing more than 20% to China's foreign trade growth. Over the same period, China's import and export growth to countries along the "the Belt and Road" was close to double digits; The import and export to emerging markets such as Latin America and Africa increased by 7% and 10.5% respectively.

At the recently held 3rd China Africa Economic and Trade Expo, the reporter met Chen Wei, the foreign trade manager of Xiangneng Hualei Optoelectronics Co., Ltd., who came as a professional audience to participate in the exhibition. She stopped in front of the Rwanda booth to inquire about the market situation.

"The market competition situation is complex and ever-changing, and we are working hard to expand the market, developing the entire industry chain from lighting chip production to related application products," she said.

Xiangneng Hualei Optoelectronics is a high-tech enterprise located in Chenzhou, Hunan. It is also a national specialized and innovative "little giant" enterprise, mainly producing light-emitting chips. In recent years, enterprises have continuously expanded their industrial chain, from chip research and development and production to the entire industry chain of related application products.

"At present, the LED lighting products produced by the enterprise have been sold to markets such as South America and West Africa, and are actively exploring more national and regional markets, including expanding into the East African market," said Chen Wei.

Since the beginning of this year, a series of international exhibitions such as the Consumer Expo, Canton Fair, and Cultural Expo have been held successively. The 6th CIIE has held promotional activities in more than 30 countries and regions... A series of open platforms have not only built bridges for Chinese enterprises to expand overseas markets, but also created opportunities for products and services from various countries to enter the Chinese market.

Entering the Hainan Ecological Software Park, green trees provide shade, birds sing and flowers are fragrant. From the establishment of the Hainan Free Trade Zone Blockchain Pilot Zone, to the construction of Hainan's first digital medical and health innovation base, and to the creation of a digital cultural and sports industry that integrates IP design, content production, and distribution, this garden style industrial park has become one of the first digital service export bases in the country.

Haiwo Technology, a subsidiary of Zhonghe Yunke Group, is located in the park and is a human resources service platform for freelancers such as e-commerce anchors. "We are optimistic about the development potential of Hainan Free Trade Port and plan to expand from serving domestic online live streaming platforms to overseas online live streaming platforms. We are currently discussing the feasibility of implementation with customers and government departments," said Fang Xing, Vice President of Zhonghe Cloud Technology.

Since the beginning of this year, the State Council has issued the "Several Measures for Pilot Connection with International High Standards and Promoting Institutional Opening in Conditional Free Trade Pilot Zones and Free Trade Ports", the General Office of the State Council has issued the "Opinions on Promoting Stable Scale and Optimal Structure of Foreign Trade", the Ministry of Commerce has increased support for foreign trade enterprises to participate in various overseas exhibitions, and the General Administration of Customs has launched 16 new measures to optimize the business environment. A series of policy measures will continue to be implemented, which will continue to promote the innovative development of China's foreign trade and unleash its potential.

Firmly taking steps in the baptism of wind and rain, seizing opportunities with the help of policies, the majority of foreign trade enterprises are moving towards the goal of high-quality development, and constantly opening up a broader Xintiandi for development.