Some of our fellows in the Foreign Trade sector predicted that this year would be a tough one, compared to the past years. This conclusion could be backed up by the number of inquiries and transactions, OEM factory orders, or the container volume of forwarders, which were at a low level. I however thought there was something changed in the international situation and more to be done in the transformation of traditional enterprises.
Taking the advantage of easy-sourced materials and well-trained labours, Chinese goods were known for their low prices. On the other hand, the lack of Brand strategies, independent intellectual property rights, and research and development teams were the main reasons to prevent them go further.
Secondly, overcapacity in various industries and serious homogenization of products has caused fierce competition in both domestic and international markets, since the Reforming and Opening Policy adopted by this country some thirty years ago. Enterprises are struggling at the expense of environmental protection and workers’ welfare to make profits by jumping on and off the margin line, while foreign purchasers have been rewarded with huge discounted procurement costs.
The 3-year-Epidemic-Battle has cost companies a lot, with a handful of insufficient cash flow they may not be able to do a planned re-investment in the near future, resulting in many industrial products that have tended to be saturated in the domestic market. Mainstream manufacturers have turned around to look for international markets as an alternative option, one of them is the air compressor manufacturers. The Development Trends of the Chinese Air Compressor Industry have more details. The cultivation of a customer base in the global market is a complex and long-term process, pretty difficult to achieve in a short period of time, and the deterioration of relations between China and the United States has also made it more melancholy for companies to expand their markets.
Finally, the quality of practitioners was uneven, many transition enterprises rushed to start their so-called “Foreign Trade”, while personnel structure was not in place. And many enterprises simply believed that they could do it as long as there is a mobile phone translation app on hand, which was completely wrong because they don’t have any clue about the in-depth logic. Foreign trade practice is a totally different world comparing the routine Domestic one, there are many traps, in dealing with unexpected events with unknown humans, whether they are genuine buyers or cheaters, this needs experience and methods, hardly explained in a few words, leave the professional things to those professional people, they could do better.
The good thing is that this winter is over and spring is just around the corner. Looking at the golden rape flowers all over the land, I believe the spring of foreign trade is not far from us.
Johnny Wayne – SH/CN – 23/Mar/2023
