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新興市場訂單撐起半邊天

On October 19, Securities Times published “Emerging market orders prop up” half of the sky “Canton Fair foreign Trade Structure continued Optimization”, the content is as follows:

Since the beginning of this year, due to the global economic slowdown and a variety of uncertainties, China’s foreign trade has encountered certain pressure. However, in the 134th Canton Fair, the Securities Times reporter found that positive factors were emerging: overseas buyers were eager to attend the fair, which increased significantly compared with the spring Canton Fair; Chinese companies have made all-round efforts, and new products and technologies have been emerging, especially new energy products. Countries participating in the Belt and Road Initiative have significantly increased their participation, and many Chinese companies have received orders from emerging markets such as Southeast Asia, the Middle East, Africa and Latin America. This also means that the structure of China’s foreign trade market is gradually optimizing, while the traditional market tends to be stable, emerging markets have brought stronger growth momentum.

 

The race to expand into emerging markets

 

“I came to both sessions of the Canton Fair this year. Compared with the spring, although there are many buyers from Europe and the United States, there are more buyers from the Middle East, Africa, India and Southeast Asia.” Huang Weifeng, general manager of Ant Group’s Foreign Trade B2B China, said at the Canton Fair 2023 cross-border Payment Development Forum for foreign trade enterprises. In the various wholesale markets in Guangzhou, there are also a large number of buyers from the Middle East, Africa, India, some have opened long-term stationed, will sell Chinese products back.

 

According to the data previously released by the Canton Fair, the Canton Fair has a total of more than 100,000 buyers from 215 countries and regions pre-registered, of which the number of European and American buyers pre-registered increased by 8.6% over the same period of the previous session, the “Belt and Road” countries increased by 11.2%, and the RCEP (” Regional Comprehensive Economic Partnership Agreement “) countries increased by 13.8%.

 

“This year’s Canton Fair, the enthusiasm of overseas buyers is very high, especially from Southeast Asia, the Middle East, Africa and other regions of the purchaser is particularly large, our first intention is to sign with a Southeast Asian purchaser.” The person in charge of the site of a company that produces motor equipment said that with the European and American markets experiencing certain pressure, the company on the one hand is to increase domestic sales, on the other hand is to increase the development of emerging markets, and the orders in these two years have also achieved a certain amount of growth.

 

“I have visited 200 Msmes in the past two years and the consensus is that we should continue to deepen our efforts in Europe and the United States, while vigorously exploring emerging markets.” Huang Weifeng frankly said that from the data of the company’s platform, compared with the decline in demand and weak growth in traditional foreign trade markets such as Europe and the United States, Japan and South Korea, the growth rate of emerging markets such as Asia, Africa and Latin America has accelerated significantly. Since the beginning of this year, Africa’s foreign trade market has grown the fastest, with quarter-on-quarter growth of more than 20% in both the second and third quarters.

 

Some of the feedback from emerging markets has also shocked Chinese companies. A Xiaomi agent from Hong Kong said: “In 2016, when my team and I went to Dubai for the first time, we held a temporary fan meeting in the local area, and only prepared a venue of 100 people, and the result was very many people, and we could not squeeze it.” “Fans are very appreciative of Xiaomi products and even know them better than our agents.”

 

Emerging markets have huge potential

 

Xiong Canxin, minister of the Exhibition Department of the Commercial Industry Committee of the China Council for the Promotion of International Trade, also said at the aforementioned forum that among the import exhibitors of the current Canton Fair, the proportion of exhibitors from countries jointly built by the “Belt and Road” reached 60%.

 

“In the past two years, the traditional trade market represented by Europe and the United States has continued to decline in economic growth, and under the continuous high inflation, China’s foreign trade is facing great uncertainty, we found through research that there are some emerging markets that have been ignored for a long time, but it is very worth expanding and digging the incremental market.” Only by finding this new growth space can we hedge the risks and uncertainties of foreign trade.” Wang Shan, executive director of Ebang Think Tank, said that from the perspective of export share, while exports to developed economies are slowing down, China’s exports to emerging markets are growing at a higher rate, and emerging markets are playing an increasingly important role in China’s foreign trade.

 

The driving force for Chinese enterprises to rush to emerging markets is self-evident. Compared with traditional markets such as Europe, America, Japan and South Korea, emerging markets such as the Middle East, Southeast Asia and Africa have huge potential.

 

In Wang Shan’s view, the population potential of emerging markets is much higher than that of traditional markets, which lays a very solid foundation for Chinese enterprises going overseas; Second, as the impact of the epidemic fades, global consumer confidence is gradually recovering, and consumer confidence in emerging markets is better than that in traditional markets. Third, emerging market economies are expected to grow faster in 2023, with ASEAN, Africa and the Middle East performing brilliantly, and emerging markets are becoming a new engine leading global economic growth. Finally, from the perspective of Internet penetration, the Internet penetration rate in emerging markets is about 65% on average, and the traditional market has reached 95%, which means that Internet traffic has peaked, and emerging markets still have a lot of new traffic and new space for Chinese enterprises to tap.

 

In addition, Wang Shan further said that from the supply side, China has a large number of industries, whether it is industrial products or consumer goods, Chinese products can meet the development needs of emerging markets. “Categories like motors, machinery and furniture sell very well in emerging markets, which need a lot of industrial and consumer goods in the Belt and Road Initiative.”

 

High quality go out

 

There are great opportunities in emerging markets, but they are not without challenges. Wang Shan said that the logistics infrastructure is relatively poor, resulting in customs clearance, logistics distribution delay, shopping experience is not smooth, and the return rate is relatively high.

 

In the view of more analysts, in the face of opportunities, Chinese enterprises may need to work harder on “internal skills”. Mr Huang says Chinese products need to be branded. “There is no premium and competitiveness of goods, the future competition will be more and more intense, and labor-intensive products in Southeast Asia can also be mass produced, Chinese foreign trade enterprises to go out need to achieve product branding.”

 

In fact, the reporter noted that a large number of new products of Chinese enterprises are products with independent core technologies, while maintaining high quality, with extremely high cost performance, so they are very competitive in the global market, and many overseas buyers are frequently consulted and in-depth understanding.

 

“In fact, our level of going out has greatly improved. Originally, it was processing trade, but now it is capital going to sea, technology going to sea, brand going to sea, service going to sea, industrial belt going to sea, and even park going to sea. “Some private Chinese companies are trying to build parks overseas to build supply chains and investment platforms.” Qin Shuo, an observer of humanities and finance, said that some Chinese software companies have also begun to go overseas in large numbers.

 

Qin Shuo said that as far as he knows, there is a chat software in the Middle East that is composed of more than 100 local teams and more than 700 service teams in Hangzhou. “Chinese engineers and programmers support this kind of service application to blossom in the world. China has strong manufacturing capabilities, service capabilities and overall solution provision capabilities, and is equipped to further serve the world.” ‘he said.