General

Where have all the disappearing foreign trade orders gone? In 2020, China's epidemic control was particularly good. With its strong organizational and social mobilization capabilities, and precise epidemic isolation policies, China achieved the stability of the entire society and ensured the orderly progress of our production and life to the greatest extent possible, during a time when wild people were in danger overseas. Amidst the huge contrast between domestic and international markets, many people's businesses experienced explosive development in 2020, with the international trade and cross-border e-commerce industries being particularly noteworthy. This also laid a huge foreshadowing for these two industries to face a huge overcapacity crisis two years later.

Impact after the 2023 blowout development

Taking international trade as an example, in 2020, many factories experienced a surge in foreign trade orders. After the explosive development of China's manufacturing plants in 2020, they will expand their production capacity crazily in 2021. As a result, they will be severely hit by the reality. Competition will intensify, costs will soar, profits will decline, and insolvency is everywhere.

I thought we would avoid the bad luck of 2021 and the market would start to recover in 2022. Unexpectedly, the virus's toxicity increased and its infectivity greatly increased. In the end, China did not achieve epidemic control under the policy of dynamic zeroing, but instead, the supply chain was greatly affected due to a large amount of expanded control and layer by layer escalation. Made in China, due to its trade war competition with the United States, has led Western countries to either explicitly or implicitly force many top buyers to leave China. So on the one hand, there was the capacity that had already expanded with enthusiasm last year, and on the other hand, there was the continuous deterioration of competition and the continuous withdrawal of international buyers, which has caused a great impact on the entire Chinese manufacturing industry at present.

Part.1

Where have the international procurement and foreign trade orders gone?

The market demand in developed countries, including Europe and America, has decreased, and historical inventory needs to be digested over a longer period of time. Even many developing countries are facing the dilemma of queuing up for bankruptcy. As a result, demand decreases, and purchase orders are bound to shrink as well.

Part.2

Many orders that were not originally Chinese due to the epidemic have also chosen to return after the overseas epidemic stabilized, which naturally appears to be a significant decrease in China's foreign trade orders.

Part.3

Europe and the United States are conducting organized international supply chain de sinicization actions, forcing large-scale international buyers not to come to China or limit their procurement scale in China. Although there are no official notices targeting the Chinese market, there are signals between the lines that they will no longer play with Chinese factories. Regarding decoupling from China, the government has a requirement that enterprises will suffer losses if they do not act recklessly, as is the case in China and also abroad.

Part.4

Where have all the disappearing foreign trade orders gone? In 2022, China was forced to implement quarantine in some regions due to epidemic control, which affected the continuous delivery capacity of China's international supply chain to overseas markets. This made many international buyers feel that they did not have the certainty and sense of security they should have, so they were forced to search for new suppliers in places outside of China.