Electrical Equipment / Components & Telecoms

In 2022, China's foreign trade of mechanical and electrical products withstood multiple pressures, with the export scale hitting an annual high, emerging industries performing brilliantly, and the industry's foreign trade volume stabilizing and improving in quality. Gao Shiwang, a spokesman for the China Chamber of Commerce for Import and Export of Mechanical and Electrical Products, predicts that although the global economic and trade situation will remain complex and severe in 2023, the inherent trend of high-quality development of mechanical and electrical foreign trade will not change, and the growth momentum of emerging industries will continue to be released. The confidence of mechanical and electrical foreign trade enterprises in seizing orders and expanding the market will be firmer, and the innovation of cross-border e-commerce, overseas warehouse and other new business forms will also accelerate.

Outstanding achievements in export of new industries

According to Chinese customs data, in 2022, China's total exports of mechanical and electrical products totaled US $2052.77 billion, breaking the US $2 trillion threshold for the first time, increasing by 3.6% year-on-year from a high base in 2019, with a two-year average growth rate of 15.4%, accounting for 57.1% of China's total exports of goods.

In 2022, China's exports of new energy vehicles, solar cells, and lithium batteries achieved year-on-year growth. According to customs data, in RMB terms, in 2022, new energy vehicles will drive the export of finished vehicles to maintain a high prosperity, driving the export of mechanical and electrical products to increase by 1.3 percentage points. The value of finished vehicle exports increased by 56.8% and 74.7% year on year, with a cumulative export of 3.321 million vehicles (US $6016 billion), a year-on-year increase for 27 consecutive months. According to customs data, in the whole year of 2022, China's exports of solar cells and lithium batteries increased by 67.8% and 86.7% year-on-year, respectively.

"Last year, high inflation led to a decrease in demand for durable consumer goods, which combined with high base factors and industry structural characteristics, led to a year-on-year decline in the export value of key traditional industries in the electromechanical field, including computers, mobile phones, household appliances, lighting equipment, and so on." Gao Shiwang said that customs data showed that throughout 2022, China's cumulative export volume of mobile phones was 822 million, a year-on-year decrease of 13.8%, and the cumulative export value of mobile phones was 142.67 billion US dollars, A year-on-year decrease of 2.5%; The cumulative export value of computers was 235.96 billion US dollars, a year-on-year decrease of 7.5%; According to customs data, the cumulative export value of household appliances reached US $85.5 billion, a year-on-year decrease of 13.3%.

Successful market expansion requires multiple efforts

Since 2022, problems such as supply chain disruptions, significant fluctuations in exchange rates, and shrinking demand caused by the Ukrainian crisis, global inflation, and US interest rate hikes have put pressure on Chinese mechanical and electrical foreign trade enterprises to explore the international market. Gao Shiwang suggested that in 2023, Chinese mechanical and electrical foreign trade enterprises should go abroad and explore the market. At the same time, relevant national departments should also play an active role in supporting enterprises to actively participate in international exhibitions by taking multiple measures to help enterprises visit customers, seize orders, and expand the market.

In terms of exploring international markets, Kaoshiwang believes that for mature traditional markets such as the United States and Europe, Chinese electromechanical foreign trade enterprises should strengthen customer communication and actively participate in well-known exhibitions in the industry to seize orders through business charter flights and other forms. For emerging markets, relevant national departments should give early warning on exchange rate, market and other risks for enterprises, organize Chinese brand exhibitions in order to develop key markets such as RCEP and the "the Belt and Road", forge ahead with key national markets and promote in-depth cooperation.

In the face of increasing trade frictions in the photovoltaic industry, Koshiwang recommends establishing a unified carbon footprint certification system for the photovoltaic industry in China as soon as possible, promoting the docking and mutual recognition of domestic standards and international standards, and cooperating to address common issues such as foreign supply chain reviews encountered in the photovoltaic industry, especially specific issues for key enterprises.

In terms of automobile export, "relevant national departments should support automobile enterprises to establish overseas automobile finance companies, which can establish autonomous and controllable overseas automobile finance companies through cooperation or joint venture, and provide competitive terminal financial service solutions through local financing and cooperation with local banks to provide support to dealers and customers." Gao Shiwang said that a special support fund for automobile export could also be established, The financing can be initiated by automobile export enterprises and participated by financial institutions and social parties.

In response to the problems of industrial policies in the semiconductor industry in the United States and Europe, as well as the use of export controls and other measures to restrict the development and industrial upgrading of Chinese enterprises, Koshiwang suggests that it is necessary to give full play to the supporting and scale advantages of domestic downstream industries, actively do a good job in stabilizing foreign investment, and support the application of domestic semiconductor equipment and materials in the manufacturing process, as well as the application of domestic chips in new energy vehicles, smart appliances, and other fields. In addition, guide semiconductor enterprises to enhance their awareness of export control compliance and strengthen the construction of internal compliance systems.

In addition, it is necessary to strengthen the role of credit insurance in promoting export trade, and on the basis of continuing to reduce premiums, appropriately increase the credit line for foreign buyers. At the same time, strengthen timeliness management, strengthen the interpretation of overseas market risk disclosure, and regularly organize enterprises to share risk courses to provide more information support to foreign trade enterprises.

Improve the construction of transnational operation capacity of electromechanical enterprises in all aspects. Gao Shiwang suggested guiding mechanical and electrical enterprises to make full use of various free trade agreements and adjust their industrial layout based on industrial development trends and market growth potential; Strengthen infrastructure investment in the central and western regions, improve the construction of transportation networks, establish freight dedicated lines, and provide certain subsidies for the logistics costs of export-oriented processing and trade enterprises, to attract investment from leading enterprises and drive the settlement of supporting enterprises in the industrial chain; Increase subsidies for the high costs of responding to international trade friction cases by enterprises.

With the increasing internationalization of Chinese enterprises, the brand economy is receiving increasing attention. It is urgent to establish a high threshold, strict supervision, and high-quality brand quality certification standard system. "Although China has CQGC (China Quality Product Certificate) "And other certification systems, but their recognition at home and abroad is not high.". Currently, the work of formulating energy efficiency standards for air conditioning products in various countries around the world is uneven, and the length of energy efficiency testing and certification cycles varies among countries. There are also some markets that do not have energy efficiency standards for room air conditioners, and product energy efficiency is mainly customized by the purchaser or designed by the manufacturer. "Therefore, it is recommended that the government, enterprises, and industry organizations work together to establish energy efficiency standards for air conditioning exports, establish an export energy efficiency labeling system, and improve the energy efficiency of air conditioning exports." Gao Shiwang said.