General

Easy foreign trade to find Huacheng foreign trade mailbox! According to import and export data, in the first half of this year, the total value of my country's import and export of goods trade was 19.8 trillion yuan, a year-on-year increase of 9.4%, of which exports were 11.14 trillion yuan, an increase of 13.2%; imports were 8.66 trillion yuan, an increase of 4.8%.

Due to the continuous spread of global inflation recently, the number of orders of my country's foreign trade enterprises has dropped sharply, and the impact of this high inflation is far greater than that of the 2008 financial crisis and the current epidemic. Therefore, my country's foreign trade enterprises and cross-border e-commerce will face a low ebb. Expect.

Amid high inflation, 72% of U.S. consumers have reduced spending this year because of rising inflation, according to the latest data from the Harris Poll. In the face of high living expenses, they have all reduced their expenditures and actively reduced their previous "interest" or "impulsive consumption".

The Amazon platform has suffered losses for the first time since 2015, with a loss of 20 billion yuan in the first quarter of this year. Recently, with the rapid depreciation of the euro, the exchange rate against the US dollar fell below the 1:1 mark, which caused great shocks to foreign trade companies on both ends of the Eurasian continent. Affected by multiple factors such as the depreciation of the euro and the weak economic growth in Europe, the orders of my country's foreign trade enterprises have dropped significantly recently.

Since 2022, the sudden outbreak of the Russian-Ukrainian conflict has intensified the pressure on foreign trade operations. Commodity prices have risen, global inflation has continued to rise, exchange rate risks have intensified, coupled with the repeated domestic epidemics, and the tightening of epidemic prevention policies. These unfavorable factors Superimposed together, the development prospects of the foreign trade industry are not optimistic.

In the past two years, as China took the lead in controlling the epidemic, coupled with the dominant position of Chinese manufacturing, the situation in the foreign trade industry was very good, and orders came from all over the world. However, with the gradual resumption of work and production in various countries around the world, overseas factories have leveled the gap with domestic factories, forming a situation of competition with Chinese foreign trade companies, receiving and rushing orders in large numbers. Especially in recent years, Vietnam's foreign trade has sprung up. caused a lot of pressure.

Easy foreign trade to find Huacheng foreign trade mailbox! Under the pressure of the current sharp drop in the number of orders, the increase in raw material and logistics costs, the sharp drop in profits, and the spillover of the epidemic, many foreign trade factories have chosen to suspend production.

In addition, the backlog of inventory is also an important reason. Due to the epidemic, some customers simply do not order products. If these backlogs cannot be processed in time and replaced by cash flow, the factory will have the risk of capital chain breakage.

So, what measures should foreign trade enterprises take to actively respond to the current unfavorable situation? The author believes that if foreign trade enterprises want to get out of the predicament, they can start from the following aspects:

1. Accelerate the transformation and upgrading of the manufacturing industry

Statistics show that the added value of China's manufacturing industry accounts for 27.4% of GDP (11.1% in the United States), with a total of 31.4 trillion yuan, ranking first in the world for 12 consecutive years. However, judging from the development status of the global manufacturing industry, China's manufacturing industry is still in the middle and lower reaches of the global value chain in many fields, and is still dominated by labor-intensive industries.

The only way out for China's manufacturing industry to maintain its competitive advantage is to transform and upgrade. In recent years, with the rise of Southeast Asian countries in the field of foreign trade, China's competitive advantage in the field of low-end manufacturing no longer exists. However, if you carefully observe the market, you will find that although Southeast Asian countries can gain a competitive advantage in the price of conventional style products, the mid-to-high-end orders basically remain in China.

At present, Vietnam’s dominant export industries are labor-intensive products such as footwear and toys, Malaysia’s dominant export industries are wood and its products, and printing, while Indonesia and Thailand’s dominant industries are resource and raw material processing industries.

It is not easy for other countries to completely replace the comparative advantages and competitive advantages accumulated by China's manufacturing industry for decades, because it includes the resilience and stability of the supply chain, and the cost performance of products. At this point, No country can compare to China, which is why Chinese products are world-renowned.

On the other hand, the transformation and upgrading of the manufacturing industry does not mean that all low-end manufacturing industries must be eliminated. It is necessary to ensure the integrity of the industrial chain and supply chain. Once lost, it is not so easy to retrieve it again.

In fact, the biggest advantage of China's export is the whole industry chain. A complete industrial chain means that overseas demand - whether it is the consumer demand of residents, the production demand of enterprises, or the investment demand, China can meet customer requirements, produce and export according to its standards.

2. Change business strategies to cope with the changing trend of foreign trade under the normalization of the epidemic

Easy foreign trade to find Huacheng foreign trade mailbox! Faced with the problem of foreign trade collection, some foreign trade enterprises adopt the customer payment before delivery, and the backlog of goods at the port is also dealt with by the marketing strategy borne by the customer. In addition, in order to survive, maintain normal operation and ensure production capacity, some foreign trade companies have also begun to undertake some orders that were not accepted in the past.

For example, in the past, customer orders were required to reach at least 5 cubic meters, but now the threshold is reduced to 2 cubic meters. Under the current situation, foreign trade enterprises should consider increasing production capacity more than profit.

Many foreign trade companies are no longer limited to a single product, but try to expand their business scope and open up a variety of products to meet the needs of different customers.

3. Increase research and development efforts to improve product quality

Easy foreign trade to find Huacheng foreign trade mailbox! If foreign trade enterprises want to improve the competitiveness of their products in the international market, they must pay close attention to the development trend of the industry and generate different demands for new products at different stages in order to better grasp business opportunities.

On the other hand, enterprises need to learn to do addition and subtraction correctly. In terms of automation and informatization investment, they need to do addition, and in terms of cost reduction and efficiency increase, they need to do subtraction, and increase revenue and reduce expenditure in product production.

4. Maintain the cash flow of the business

Cash flow is the lifeline of an enterprise. The reason why a large number of housing companies have gone bankrupt recently is that the debt crisis has led to the breakage of the capital chain and the loss of cash flow, so the enterprise has embarked on the road of bankruptcy.

Therefore, the most important thing for foreign trade enterprises in the face of reduced orders and gross profit margins is to maintain a stable cash flow, to survive as qualitatively as possible during the economic downturn, and to take orders as soon as possible, even if the gross profit margin is only a few A point, in order to survive, but also to accept.

Easy foreign trade to find Huacheng foreign trade mailbox! "Stable quantity and quality improvement" is the main goal of my country's foreign trade work this year. In the current trough of foreign trade import and export, foreign trade enterprises should make cross-cycle adjustments, take effective measures to deal with the unfavorable situation, take the initiative to adjust and actively transform, and in the process of transformation seek development. Although there are many difficulties in transformation and upgrading, only by crossing this hurdle will the company have a future!