The first half of 2020 is undoubtedly unbearable. Sudden epidemics, trade frictions, and border conflicts, including the number one economic power, the United States, and many European and American countries that foreign trade companies rely heavily on, are all affected by the epidemic and economic recession, and the international market Demand has fallen sharply, downward pressure on trade continues to increase, and even due to the adjustment of import and export policies in some countries, trade barriers continue to rise. All these are new challenges for the foreign trade industry and will bring a new round of reshuffle of the foreign trade market.
At present, the international situation of the epidemic is still severe. What is the current development situation of the domestic industry and how will it be affected? How will foreign trade companies overcome this difficulty? Yu Bin has been observing for a period of time and is looking forward to sharing it. It will restore the true status of this industry and let us see the future of this special industry together.
Foreign trade rescue policies continue, but it is difficult to stop the decline
After the outbreak of the epidemic in 2020, the domestic epidemic was gradually brought under control. After the gradual resumption of production in various industries, some industries suffered heavy losses, and some industries were unsafe. However, the foreign trade industry, due to the spread of the epidemic internationally, has continued to stalemate and is facing severe challenges. Many foreign trade companies have even had to choose to restructure or close down because of their cash flow break.
It is understood that the Ministry of International Commerce, in conjunction with various departments, has successively promoted the introduction of a series of policies and measures for stabilizing foreign trade and implemented them.
According to the ¡°Report on China¡¯s Foreign Trade Situation (Spring 2020)¡± recently released by the Ministry of Commerce, in the context of the global spread of the new crown pneumonia epidemic, the sharp decline in international market demand, and the increasing downward pressure on trade, China¡¯s The growth rate of foreign trade import and export has slowed down, but the decline in import and export has narrowed since March 2020, and the high-quality development of foreign trade has continued to advance.
In order to stop the decline of the foreign trade industry and stabilize the basic market of the foreign trade industry, the Chinese government has issued a series of stability maintenance policies in a timely manner to help foreign trade companies overcome difficulties and minimize the impact of overseas epidemics on the foreign trade industry.
Support the development of foreign trade in terms of improving export tax rebates, increasing foreign trade credit, increasing export credit insurance support, and adding cross-border e-commerce comprehensive pilot zones, so as to effectively alleviate difficulties for enterprises and fully stimulate the vitality of market entities.
First, improve the export tax rebate policy and expand the coverage of short-term export credit insurance. For leading foreign trade companies and small, medium and micro foreign trade companies, we will relax support conditions for policy-based financial institutions and increase support in light of local conditions. In other words, for foreign trade enterprises of different sizes, increase foreign trade credit and increase export credit insurance support, so that national policies can be implemented.
Secondly, through the "Online Canton Fair", domestic export companies will be provided with more opportunities for display, promotion, and negotiation, so as to increase orders and retain overseas technology and markets. At the same time, it will bring new business opportunities through the innovation of foreign trade business models. It is understood that in order to respond to the market crisis brought about by the epidemic, the country has established 46 new comprehensive cross-border e-commerce pilot zones, piloted priority policies in taxation, supervision, and facilitation, and combined with online marketing to realize online transactions and encourage key enterprises Build a batch of high-quality overseas warehouses and improve the international marketing network system.
Third, through other forms of foreign trade and stimulating international logistics supply chains, the export market will be revitalized. For example, through the national macro policy regulation, promote the domestic sales of foreign trade products to open up domestic sales channels, improve domestic sales capabilities, and make the domestic sales of foreign products unimpeded. At the same time, by stabilizing the international logistics supply chain, the impact of countries hardest hit by the epidemic on domestic foreign trade enterprises will be reduced.
Although various favorable policies continue, they still haven't stopped the decline of foreign trade. The data in the above report shows that in the first five months of 2020, my country¡¯s total import and export of goods traded in RMB 11.54 trillion, down 4.9% year-on-year (the same below). Among them, exports were 6.20 trillion yuan, a drop of 4.7%; imports were 5.34 trillion yuan, a drop of 5.2%. The trade surplus was 859.81 billion yuan, a decrease of 1.2%. Although imports and exports fell by 9.5% from January to February, the declines in March, April and May were 0.8%, 0.7% and 4.9% respectively.
With the rapid resumption of work and production in my country, the decline in import and export volume has narrowed since March 2020.
However, as the situation of foreign epidemics is still not optimistic, the frustration of foreign trade market is still very obvious. Investigate its influencing factors, including:
Affected by the epidemic, demand in foreign markets plummeted. Foreign trade companies encountered foreign customers canceling planned orders before the epidemic, and new orders were also facing difficulties in signing contracts. In contrast, some small and medium-sized trading companies bear the brunt.
Secondly, affected by the Great International Economic Recession, whether it is the entire industrial chain or the supply chain interruption due to logistics reasons, international trade has been strengthened. For automotive companies and electronics factories that have long supply chains and are affected by international and domestic supply links, they have suffered heavy losses. Not only has the cost of raw materials dropped sharply, but there has also been a situation of short supply, which has led to difficulties in its operations.
Thirdly, due to the impact of the epidemic, foreign trade companies¡¯ businesses have shrunk, while business operating costs have remained high. Because countries implement trade protection strategies, international trade barriers are gradually rising, and trade costs are also rising.
Finally, the domino effect brought about by the epidemic has strained the capital flow of companies. Not only is the pressure on factory rents and wages paid by workers, but also because of the lengthened settlement cycle of orders and accounts for overseas customers, the increase in inventory costs, and corporate financing difficulties, etc. Factors have led to a shortage of cash flow for enterprises, and even caused some small and medium-sized enterprises to break the capital chain and make it difficult to sustain their operations.
Based on the above analysis, the trauma caused by the epidemic to international foreign trade is invisible and will be long-term. The impact lasting for more than half a year has severely injured some foreign trade companies, and its future impact is also incalculable.