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The Canton Fair Ended, The Data Attracted The Most Attention, The Export Orders To The US Were Reduced By 30%, And Half Of The Export Enterprises Will Be Affected
- Nov 06, 2018 -

On November 5th, the first China International Import Expo opened in Shanghai, which is also the world's first large-scale national exhibition with the theme of import. Just the day before, on November 4th, the 124th Canton Fair, the largest national exhibition of China's largest export theme, just ended.

The Canton Fair has always been a barometer of the import and export trade of the Mainland. The transcripts handed over by the Canton Fair are cause for concern. Statistics show that the turnover of the 124th Canton Fair in the United States fell by 30.3% year-on-year, only 2.79 billion US dollars. Not only the United States, but the number of attendees in other major developed economies has also generally declined. Among them, the major developed economies and traditional markets generally declined, the number of EU purchasers decreased by 3.93%, the number of US purchasers decreased by 4.07%, and the number of Hong Kong purchasers decreased by 6.34%.

Obviously, the shadow of Sino-US trade frictions has appeared in the Canton Fair, which has brought greater uncertainty to Sino-US bilateral economic and trade relations and even the world. The data of the Canton Fair is also consistent with the PMI data published by the National Bureau of Statistics.

In October, the PMI data export new orders index has hit the lowest since 2016. From the results of the entrepreneur survey, the impact of the Sino-US trade war has begun to appear. This means that the expected performance of recent export data is more due to the export-taking factor. The actual long-term order status may not be optimistic. More market participants estimate that the impact of more trade friction will be concentrated in the first half of next year.

Trade war affects the turnover of the United States by 30%

The Canton Fair has always been a barometer of the import and export trade of the Mainland. The transcripts handed over by the Canton Fair are cause for concern. Xu Bing, spokesperson of the Canton Fair and deputy director of the China Foreign Trade Center, said on the 4th that the number of overseas buyers of the Canton Fair has dropped slightly.

The number of buyers attending the conference was close to 190,000, which was 1.11% lower than that of the 2017 Autumn Fair. Among them, the major developed economies and traditional markets generally declined. The number of US buyers increased slightly by 4.07% year-on-year, the number of EU purchasers decreased by 3.93%, and the number of Hong Kong purchasers decreased by 6.34%.

Compared with the major developed economies and traditional markets, the number of purchasers and turnover has shown a downward trend. However, the participation of enterprises and buyers along the “Belt and Road” countries and regions is optimistic, and this year's Canton Fair new buyers have a common trend. 77,733 people. Among the top ten sources of buyers, the countries and regions along the “Belt and Road” accounted for 7 places. Among them, the number of buyers attending the country increased by 0.16% year-on-year, accounting for more than 44% of the total number of participants.

In terms of the transaction amount, there was also a slight drop. The cumulative export turnover of the Canton Fair was 29.86 billion US dollars (206.94 billion yuan), a slight decrease of 1% compared with the autumn of 2017. The Sino-US trade friction has also brought great uncertainty to the normal economic and trade cooperation between Chinese and American companies. Judging from the operation of the Canton Fair, the number of US buyers reached 10,739, down 4.07% year-on-year, and the export to the US was 2.79 billion US dollars, down 30.3% year-on-year.

Xu Bing believes that with the deepening of the supply-side structural reform in China, the new kinetic energy of China's foreign trade development is accelerating, and the diversification of the enterprise market has made new progress. These are important foundations and powerful conditions for the development of foreign trade. Based on the square factor, it is expected that China's foreign trade import and export will maintain steady growth throughout the year, and the quality and efficiency will be further improved."

Exhibitors generally reported that foreign trade exports have risen steadily this year. According to the Canton Fair survey, nearly 90% of the electromechanical enterprises said that the company's exports in the first three quarters of this year increased or remained the same as the same period of the previous year. Among them, 80% of enterprises believe that the export situation in 2018 is better than the previous year or flat. However, considering the external environment where the cost of comprehensive factors such as raw materials and labor force continues to rise and the trade friction between China and the United States has increased, exhibitors also believe that the export situation next year is not optimistic.

Nearly half of Zhejiang export enterprises are expected to have a more severe export situation next year.

Obviously, export companies have generally felt the huge impact of Sino-US trade frictions. It is worth noting that at the end of October, in the survey of export orders of exhibitors from the Canton Fair, Zhejiang Province found that nearly half of the enterprises expect the export situation to be more severe next year.

According to the briefing of the Zhejiang Provincial Department of Commerce, during the 124th Canton Fair, Zhejiang Province conducted a questionnaire survey of exhibitors in the province. Among the 4,690 companies involved in the survey, it is expected that the export situation faced by enterprises in 2019 will be more severe. 2,138 (45.6%), with 1,110 (23.7%) expected to be in line with 2018, are expected to be slightly better than 673 (14.3%) in 2018, and are expected to be significantly better than 57 (1.2%) in 2018. . Nearly half of the companies expect the export situation to be more severe next year.

Among the 4,690 companies, about 60% of enterprises export more than 10% to the US, of which more than 20% are between 10% and 30%. A total of 1,882 companies' products are included in the list of goods taxed in the United States. Among them, most (about 70%) of the enterprises in the list of goods accounted for less than 30% of the total exports of enterprises, but also nearly 15% of enterprises said that the proportion of listed goods in total exports exceeded 80%, this part of the enterprises will be affected serious.

After the tariff increase, from the new orders for the United States, there are 245 enterprises expected to achieve growth, accounting for 13% of the affected enterprises; 368 flat, accounting for about 20%; 66%, of which more than 50% of enterprises expect the number of new orders to be reduced by about 10% in the future.

From the perspective of exports to the United States in 2019, it is estimated that there will be 199 enterprises growing, accounting for 11% of the affected enterprises; 395 companies, accounting for 21%; and 1,264 companies, accounting for 67%, of which half of them said Exports to the United States will fall by about 10% in 2019.

4 major changes in export enterprise orders

It is worth noting that in this notice of Zhejiang Province, on October 26, Sheng Qiuping, the director of the Zhejiang Provincial Department of Commerce, made a special trip to investigate the second-stage exhibitors of the Canton Fair, and through the patrol and corporate symposium, the company’s orders and Sino-US trade. A comprehensive and in-depth investigation of the problems and countermeasures faced by enterprises under the friction situation has revealed that the following major changes have occurred in corporate orders:

1. Speed up the order shipment process. Due to the requirements of US customers, the newly accepted US orders basically require shipment before the end of November. Many enterprises rushed to order and catch the ship before the boots did not land, to fight for some profit margins, to avoid the 25% uncertainty of 2019 tariffs.

If Zhejiang Funou Tourism Products Co., Ltd. can order furniture products before November 15th, it will not be affected by tariffs; if it can not be completed before this date or there are follow-up orders, the increased 15% tariff will be It is the responsibility of the company itself.

2. The buyer's price is obvious. Some companies are not directly affected by the tax increase, but the company's US customers have concerns and the price is obvious. If the products are included in the tax, the long list will be affected. In addition, some other countries' buyers have come to "join the fun" and "fire and robbery" to carry out different levels of price reduction.

Since the beginning of August and September of this year, Hangzhou Zhongtai Industrial Group Co., Ltd. has successively requested customers in the United States to reduce prices for various products. It is hoped that the sales price will be lowered to avoid the possibility of being affected by taxation. And there are customers who specialize in flying China and the company to start negotiations on the direction of cooperation.

3. It is expected that orders for the US will decrease next year. Many companies report that the phenomenon of catching goods in the last two months of this year has a certain pulling effect on the growth of export data, but next year, US customer orders are expected to be greatly reduced. Huixin Import and Export Group Co., Ltd.'s current orders have dropped sharply, and the profit margin has declined. The specific range is affected by its products, customers, time and so on. Under normal circumstances, it is now a US customer order period, but now hesitates. Waiting, waiting, and some have already transferred to other market suppliers, and it is expected that the adverse effects will appear next year.

4. Other deductions occur. According to the survey, some US buyers have put forward some unreasonable demands for exporters to make deductions in order to hedge the additional costs brought by tax increases. Zhejiang Wangbin Decoration Materials Co., Ltd. recently received several customers' problems regarding the quality, damage and other deductions that have not occurred before, and the company's product quality has always been stable. Customers adopt this method to hedge and increase taxes. The extra cost caused the factory to be unable to maintain the business of this product.