How will the new coronavirus affect the foreign trade of the home appliance industry?

Currently, the impact of the epidemic on the economy and other fields is gradually emerging. Affected by the COVID-19 epidemic, my country's home appliance industry has also encountered considerable challenges in foreign trade.

 

 

The background of the COVID-19 epidemic is relatively complex. The domestic economy is in a period of shifting growth, and the first phase of the China-US economic and trade agreement has just been signed. After the WHO classified the COVID-19 epidemic as a PHEIC on January 31, although the WHO did not recommend any travel or trade restrictions on China, the influence of public opinion and panic still had a certain impact on my country's import and export trade.

It is worth noting that although the new coronavirus epidemic constitutes a "public health emergency of international concern" (PHEIC), the WHO highly affirms China's prevention and control work and believes that there is no need to take measures to restrict international movement of people and international trade. It will be re-evaluated after 3 months. If the epidemic is under control by then, the certification will be revoked.

Currently affected by the epidemic, my country's home appliance industry exports have been affected to varying degrees. The flow of domestic personnel has been blocked, the process of resumption of work has been restricted, and production and business activities, including foreign economic and trade personnel exchanges, have been partially suspended, which has even led to delays or even cancellations of the delivery of some overseas orders signed by the company years ago. The company may bear certain losses due to the inability to perform the contract on time. , the operating costs of enterprises due to factors such as factory rent, taxes and fees payable, epidemic prevention materials, logistics and transportation will also increase, especially small and medium-sized home appliance companies will be more affected.

In addition, although the level of intelligent manufacturing in my country's home appliance industry has significantly improved in recent years, it is still a labor-intensive industry. The suppression of personnel flow caused by traffic jams caused by the epidemic may cause some companies to face the problem of labor shortage or loss. , especially enterprises in Hubei, will also inhibit the export of my country's home appliance industry.

Nowadays, the COVID-19 epidemic has caused concerns from all walks of life about the disruption of global supply chains and the acceleration of manufacturing relocation. The U.S. Secretary of Commerce even said coldly that the epidemic in China will help the manufacturing industry return.

In fact, the Ministry of Commerce is promoting the upstream and downstream enterprises in the foreign trade industry chain to restore production capacity, especially key links and leading enterprises, to stabilize the global supply chain.

It is understood that the Ministry of Commerce is making every effort to strengthen measures to stabilize foreign trade in the fields of finance, taxation, finance, and insurance, including achieving export tax rebates in full and in a timely manner, expanding the coverage of export credit short-term insurance, expanding foreign trade credit, and giving priority to ensuring the foreign trade capital chain.

In response to concerns about industrial relocation caused by the epidemic, Li Xingqian, director of the Department of Foreign Trade of the Ministry of Commerce, said that the impact of the epidemic on the supply chain in the field of foreign trade mainly occurs at the production support level, and product integration encounters temporary difficulties. This impact is partial and limited. It's also completely controllable. China's status in the global industrial chain and supply chain will not change.

As the person in charge of Midea Group, a Chinese home appliance manufacturer, said in a recent interview: "The Shunde District where we are located has more than 3,000 home appliance production and supporting industries. The machines in the Pearl River Delta are in operation, and the global industrial chain is stable."

As we all know, with the rapid development of China's foreign trade after joining the WTO, my country has become the world's largest country in goods trade. In 2019, under the severe situation of internal transformation pressure and external US tariffs, my country's foreign trade still achieved a contrarian growth of 3.4% and hit a record high. According to data from the General Administration of Customs, the cumulative export volume of major appliances in 2019 was US$70.92 billion, an increase of 3.3%.

 

 

my country's home appliance industry is the representative industry with the earliest marketization and the deepest degree of internationalization. A group of main enterprises have transformed from participants and followers in the international market to leaders, and from producers to innovators in the global industrial chain. They have shifted from product output to comprehensive global operations such as branding, management, and quality. It can be said that in the face of various risks and challenges, home appliance companies have shown sufficient confidence and resilience.

With policy support and companies strengthening epidemic prevention and control, home appliance companies such as Haier, Midea, and TCL have generally resumed production, and the production resumption rate of some production lines has reached more than 90%.

Judging from the experience after the SARS epidemic in 2003, it is expected that the impact of the epidemic on imports and exports will most likely be concentrated in the first quarter of 2020, and the future rebound will depend on how long the epidemic lasts. Therefore, do not over exaggerate these short-term impacts, but make judgments from a medium- to long-term perspective.

Qian Jun, executive dean of the Fanhai International School of Finance at Fudan University, believes that although my country's foreign trade industry will be affected during the epidemic, these effects are only temporary. After the epidemic is over, trade activities will recover quickly, which will have a long-term economic impact. Not big. The top priority is to protect the foreign trade industry in terms of credit, flexible employment, and ensuring early resumption of work.

However, it should be noted that the external environment is still complex and severe, and there are still many uncertain and unstable factors. This requires us to effectively cultivate our own "internal strength", assess the situation, and steadily promote the stable and quality development of foreign trade.

In this regard, the China Household Electrical Appliances Association pointed out in an official WeChat post that we should realize that the overseas market expansion of the home appliance industry cannot rely solely on product exports. Promoting international strategic transformation and building global brands are all developments that companies should consider at this stage. focus.

In short, with the global spread of the epidemic, the foreign trade situation this year may be more severe than last year. Formulating long-term plans, production plans and development goals, and having the courage to broaden horizons and expand the market are the best ways for the long-term growth of the home appliance industry.

Information source: China State Grid   http://news.cheaa.com/2020/0304/569818.shtml