General

Why has foreign trade orders declined so sharply this year? You know what? In the past, various major coastal ports that were difficult to obtain a single box of containers have experienced varying degrees of container vacancies, and the volume of foreign trade orders from Europe and America has significantly decreased. In dollar terms, China's exports fell 0.3% year-on-year in October last year. In January, it decreased by 8.7%. It decreased by 9.9% in December.

Why has foreign trade orders declined so sharply this year? According to statistics, the cancellation rate of ships heading to Europe and America in the coming weeks has reached an astonishing 31%. Sony has just left behind a production capacity of 150000 units, while Thailand has taken away 2 million units of production capacity. Honda's 24 global factories originally relied on parts made in China. But now only the production of products for the Chinese market remains. Various signs indicate that the Chinese economy has encountered unprecedented severe challenges.

Firstly, the sharp decline in China's foreign trade orders is not due to the sluggish world economy. But Europe and America are deliberately reducing their dependence on Chinese manufacturing. And transfer China's expertise in low-end manufacturing to Southeast Asia. Because orders from India and Vietnam have doubled during the same period.

Secondly, this indicates that Chinese manufacturing is not yet strong enough and has not undergone a large-scale transformation into Chinese creation. It is easily replaced by countries and regions with lower labor costs. China may be forced to fully develop towards high-end manufacturing and must possess irreplaceable brands, technologies, and products.

Thirdly, this also indicates that the United States, as the world's political and economic leader, makes it difficult to have an undeniable influence. The decoupling from China that Trump has been advocating for has already shown signs to some extent, and we should be prepared.

Fourth, the Russia-Ukraine conflict is like a strong man beating up a weak person. Maintaining neutrality at this time would lead to serious misunderstandings or resistance among many countries that firmly support Ukraine and are major countries on all continents. This will also worsen China's external relations. Foreign Minister Qin Gang was aware of this issue and at the beginning of his tenure, he changed the previously misunderstood view of China Russia relations as non aggressive, unlimited, and endless to a more divisive view of non alignment, non confrontation, and non targeting of third parties. The new ambassador sent to the European Union also stated to Europe that there can be no limit to cooperation between China and Europe. But Europe, which is full of hostility towards Russian military actions, will find it difficult to reverse its emotions for a while.

Why has foreign trade orders declined so sharply this year? In the past, Europe, as a counterweight to the United States, had good relations with China. But recently, China Europe relations have significantly declined, with the United States, Europe, Japan, and ASEAN serving as China's largest export markets and competitors. In fact, this poses a huge new challenge to China's foreign trade. At this point, China's giants need to adjust the direction of diplomacy and trade.