Chinese Export Enterprises Lose Competitiveness?

Anderson: at present, China's traditional export enterprises have not lost competitiveness. [background] in April 11th, the General Administration of Customs issued the situation of China's import and export trade in the first quarter of this year.

Of which, exports of US $305 billion 900 million, an increase of 21.4%, is 6.4 percentage points lower than that of the same period last year.

In March, exports amounted to 108 billion 960 million US dollars, an increase of 30.6%.

Since the reform of the RMB exchange rate formation mechanism in July 2005, the appreciation of the RMB against the US dollar has exceeded 15%.

A research report from the Ministry of macroeconomic information of the State Information Center believes that RMB appreciation of 10% will lead to a 8.10% reduction in commodity exports.

Labor costs of export enterprises are also rising.

In January 1, 2008, the new labor contract law, which was implemented in China, strengthened the protection of employees, and was considered to be a new factor in pushing up the cost of labor in enterprises.

The United States is the second largest trading partner of our country, accounting for about 20% of China's total export volume. Influenced by the subprime mortgage crisis and the acceleration of the appreciation of the RMB against the US dollar, China's recent export growth to the US has slowed down significantly.

Fang Gang, director of the National Institute of economic research, said at a 2008 annual meeting of the Boao forum for Asia that the US economic growth rate slowed by one percentage point would directly cause China's exports to the United States to decline by 5%. Meanwhile, the US recession will also affect Asian and European economies and indirectly affect their demand for Chinese goods.

Through the analysis of China's export growth rate, market share, export enterprise profitability and pricing power, UBS global emerging market economist Jonathan Anderson (Jonathan Anderson) believes that China is still in the early stage of adjustment, and it is too early to discuss whether Chinese exporters are in crisis.

At present, China's traditional export enterprises have not lost competitiveness.

With the accelerated pace of RMB appreciation, large-scale adjustment of export rebates and processing trade policies, rising labor costs, rising land prices, environmental protection requirements and public awareness, is China's traditional export enterprises in trouble?

He believes that in the face of these factors, China will undoubtedly undergo a series of adjustments.

Internationally, similar adjustments take years, rather than months.

Anderson believes that China's export performance is still good at the moment.

Although the annual growth rate of exports decreased from 30% in 2003 to 20% in 2007, export growth remained strong, and China remained the strongest export growth region in Asia.

In the first quarter of this year, although there was a snow disaster, the export growth rate in January and February was still 15%.

In addition, the share of Chinese exports in the global market continues to rise.

Europe is China's largest trading partner. In the past ten years, the market share of Chinese exports in Europe has risen all the way.

The United States is China's second largest trading partner.

Although the market share of Chinese exports in the United States has not increased in the past year under the influence of the US economy, the current market share is still at a high level.

Among them, China's light industry and electronic export commodities still have a market share of 55% and 35% respectively in the US.

For the profit margins of China's export enterprises which are highly concerned by the market, Anderson believes that China's export enterprises have not maintained their export growth by lowering their profit margins.

He analyzed the profit margins of China's light industry and heavy industry enterprises.

In the past five years, the profit margins of China's light industrial enterprises have remained stable. In recent years, they have not only declined but increased slightly.

The profit margins of heavy industry enterprises in China over the past five years coincided with the profit margins of automobiles, steel and smelter industries.

Anderson analyzed the pricing power of export enterprises.

He believes that because China's exporters' market share keeps rising, Chinese exporters, as a whole, have strong pricing power. They can pfer their costs to importers by increasing the prices of export commodities, thereby maintaining their own profit margins.

He also analyzed the prices of Chinese imports in Hongkong, which has increased by about 3% in the past four years, especially consumer goods, with a price increase of more than 4%.

Regarding the issue of collective withdrawal of Chinese export enterprises from coastal areas, Anderson believes that although the proportion of exports in Guangdong has decreased, the export volume of Jiangsu, Fujian and Zhejiang in the same coastal areas has been increasing.

He further analyzed the reasons for the decrease in exports in Guangdong, not because export companies had withdrawn from Guangdong.

The main reason is that in recent years, the proportion of exports of electronic commodities has been increasing, while the surrounding areas in Shanghai have taken the lead in the production of electronic commodities. The traditional export advantages of Guangdong are still toys, furniture and footwear, which has led to a decrease in the proportion of exports in Guangdong.