China's Export Enterprises and Institutional Innovation Dividends

China's export enterprises and institutional innovation dividends Chinese Minister of Commerce Gao Hucheng emphasized the innovation of systems and mechanisms at the two sessions, which will help stimulate corporate institutional dividends. Export enterprises should not miss the opportunity and should take the initiative to participate in the process of mechanism innovation, especially enterprises with many years of experience in the foreign trade market, can best contribute experience and wisdom, and implement institutional dividends through the interaction between officials and the public.

The appreciation of the RMB has slowed since the beginning of the year, and the US and European markets are currently recovering. The US economy grew by 3.2% in the fourth quarter of last year, and consumer spending was at a three-year high. China's exports should rise. Exports to developed countries generally improved. This is a good time to deploy a "post-financial crisis" long-term foreign trade strategy.

Interactive topic: Will institutional innovation become a bonus for Chinese exporters?

It is true that emerging markets have been hit by the withdrawal of international funds caused by the withdrawal of quantitative easing by the United States. When the proportion of these markets in China's exports is increasing, the sudden contraction of economic growth will put pressure on China's export situation, which is even more prominent. the importance of overall planning.

In March's "Going International" column, I mentioned that US foreign trade promotion is relatively extensive, so I thought to check the January 2010, President Obama's "National Export Initiative" (National Export Initiative) score. This initiative is part of Obama's revitalization plan after the U.S. economy fell into the so-called "Great Recession" after the 2008 financial crisis. It helps small and medium-sized enterprises to open up foreign trade and sets an ambitious goal: doubling exports within five years and creating two hundred domestic sales at the same time. million export-related new jobs. Four years later, half of that goal has not been reached. Europe's economy has bottomed out and it is reasonable to say that from the demand side, it will help US exports, but the growth rate of US exports has slowed down. The problem is obviously that the rush to get started in those days, large and medium-sized enterprises were caught together, wasting resources and getting twice the result with half the effort.

In the total foreign trade volume, large-scale enterprises make the largest contribution, which is the same in all countries. The U.S. ranks in the top 1 percent of companies, accounting for 80 percent of total exports. These large corporations, which are mostly multinational corporations, do not need government assistance. The role of the government is to use the power of political diplomacy to create a favorable environment for these companies to compete abroad, such as promoting the Trans-Pacific Partnership (TPP). For small and medium-sized enterprises, the initiatives such as financing assistance, simplifying export procedures, adding special personnel in foreign embassies to contact international trade, sending more economic and trade promotion delegations, etc., will help small enterprises that have never set foot in export. Small enterprises with limited benefits and small scale, whose export products are too small to cover fixed costs, rashly invest in foreign trade will only increase their burden and highlight their inherent weaknesses. Before these enterprises enter the foreign trade market, they should first make efforts to improve productivity and product quality, and establish after-sales service. Export policies that encourage seedlings will only lead to waste.

The best object of government support is to strengthen the support of enterprises that already have a market in foreign trade, help them improve productivity, increase the added value of products, increase export profits, expand domestic capital investment, and form a virtuous circle. Obama's National Export Initiative provides a similar answer.

Since the beginning of this year, China's export growth has slowed down, which has led to foreign predictions that China's trade surplus may disappear in a few years, entering an era of trade deficit. This is not an alarmist, and looking at Japan, a country founded on trade, its trade surplus and the world's highest foreign exchange reserves seem unshakable for many years. However, after the energy crisis caused by the Fukushima nuclear power plant, Japan had to increase imports of crude oil and natural gas. , for three consecutive years, imports were greater than exports. Last year, the yen depreciated sharply. The price of imported energy settled in US dollars rose, but foreign exchange factors did not speed up exports. As a result, the trade deficit in 2013 reached 11.47 trillion yen. In January this year, the current account deficit hit a record high. A record high of 1.589 trillion yen. The persistent foreign trade deficit may not be reversed until 2016. Leaving aside the Fukushima nuclear power plant, Japanese companies' relocation of production overseas, coupled with product competition from emerging economies, has dampened long-term export growth.

In China's export entities, foreign-owned enterprises occupy an important position, and in recent years, due to rising wages and rising costs of improving the working environment, the proportion of foreign direct investment has shifted from manufacturing to non-manufacturing. In the future, if labor-intensive industries are no longer the backbone of exports, coupled with the factors of competition with products from other emerging economies, the possibility of trade surplus reversal in the future cannot be ruled out.

I once asked an official from the Commerce Department of the U.S. Embassy: Renminbi appreciation, rising wages, and investment in improving the working environment are all well-known pressures on export costs, but what is the impact? How big is it? He said that since the renminbi exchange rate reform in 2005, half of the export industry is pessimistic and half is optimistic. The former believes that the cost of goods is the most important determinant, and buyers will not look back to Bangladesh or Cambodia manufacturers when they see poor price comparison; the latter believes that improved management and technical input can overcome the rise in foreign exchange and labor costs. Over the years, the pessimists have been proven, and the optimists have stood the test of time. Buyers such as Wal-Mart do turn to countries with low wages to place orders. Even if the same buyer has different needs at different price points, China has not lost a large market due to years of skilled supply chain operations. But whether this advantage lasts depends on whether productivity can continue to improve.

Export companies have considerable room to improve their productivity. For example, the trend of labor difficulties is becoming more and more severe. In the past, it was impossible to solve the problem by increasing the number of manpower. The factory would rather fire incompetent managers than easily dismiss skilled workers on the assembly line. This is a challenge to managers and a driving force for improving productivity.

There is also the continuous update of the digital revolution. From cloud computing and crowdsourcing (Crowdsourcing), using the characteristics of the network to respond to all calls, some processes are assigned to people who do not know each other online to complete the collective completion. Export enterprises can Further improve supply chain efficiency and scale without sacrificing flexibility.

The country's industrial policy has encouraged independent innovation for many years and accelerated the transformation of the industrial structure. The expectation for export enterprises has changed from seeking quantity to seeking quality, so as to increase the added value of exports. This transformation is a long-term project, with high uncertainty in R&D and innovation, and it is difficult for small and medium-sized enterprises to make breakthroughs in this field, so the support of the state is even more important. These internal and external changes have brought challenges and opportunities to export enterprises. Appropriate government support can achieve a great effect.