1970-01-01 08:33:29
Zheng Jianpei, a garment exporter in South China''s Guangdong Province, could not idle about, although people across the country were decorating their houses with lanterns and streamers to celebrate the New Year. Against chilly wind, Zheng and his fellow staff flew northward to attend an exhibition with packages of sample garments in Beijing, in an attempt to expand the domestic market.
"The economy is in a low tide. We enterprises have to learn to save ourselves," said Zheng, board chairman of Dongguan Hao Heng Garment Co. Ltd., which has largely been dedicated to garment export for more than a decade.
Hammered by the global financial crisis, the year 2008 proved hardest for most Chinese exporters over the past 10 years. It was also a year China, with import and export contributing to about 60percent of its gross domestic product (GDP), adjusted its foreign trade policies most frequently in the past decade.
HIT BY PLUNGING SALES
Zheng has been engaged in the garment export business for 11 years, coming through the stages of processing with customer''s materials, producing under the OEM (Original Equipment Manufacturer) mode, and developing his own brands. In the first five years in his career, Zheng worked as a worker and then a partner in a garment mill. In 2002, Zheng set up his own tailor shop in Dongguan City, a garment export hub in South China, selling T-shirts and sportswear across the world.
"I had a good time up to 2007, when I expanded export at an annual rate of 60 percent in sales volumes," said Zheng brightly.
Misfortune befell in 2008, forcing Zheng''s sales to plummet month by month.
"In the beginning of 2008, I received fewer orders from the United States and Australia," said Zheng. But the situation was unclear at that time, because Zheng's orders from Europe, Middle East and South Asia remained to increase about 10 percent.
The grim situation became apparent in the order-placing meeting in March, for goods delivered in autumn. "My orders from the United States and Australia dropped 70 percent. European buyers did not show up as scheduled. They came in April, with orders cut by half. I managed to keep orders unchanged for Middle East and South Asian buyers," said Zheng.
The situation turned worse in the May order-placing meeting, for winter delivery. "Only a few clients from the United States and Australia came, without any orders. They told me not to invite them in 2009, as they will not come up," said Zheng. His orders from EU shrank to 20 percent of previous sizes. And orders dropped from Middle East and South Asia.
Zheng's story was duplicated nationwide. According to the National Bureau of Statistics, after months of decline, China's export decreased 2.2 percent in November, the first time in the past seven years.
Anyway, China managed to maintain a steady growth in foreign trade in 2008, against pressures from serious natural disasters and the worst global financial crisis over the past 100 years.
Commerce Minister Chen Deming estimated China's imports and exports would surpass 2.6 trillion U.S. dollars for 2008, up about18 percent over the previous year, despite the downturn in foreign demand during the second half. Though the country's exports to European, U.S. and Japanese markets grew much slower, its sales to emerging markets, such as India and Brazil, went up rapidly, said Chen Deming.
INDUSTRIAL TRANSFORMATION
To escape the jaws of crisis, increasingly more frustrated Chinese exporters set out to tap the domestic market.
But it proved a hard path for most exporting businesses to set eye on the domestic market, as they ran short of marketing channels, goods designed for domestic markets, and proper account settlement mechanism.
Zheng proved much luckier than most counterparts, as he had a way of escape. To prevent risks and expand sales, he set foot in the domestic market in 2005, despite the fact that the domestic market was small compared to his export business.
Since July, 2008, Zheng started to prioritize his company's strategy by more vigorously exploring the domestic market.
Zheng estimated his company would have sales values dropping by 20 percent in 2008 from the previous year. "This would be a pretty good result, as we duly changed from export to domestic sales," said Zheng.
About 70 percent of his company's sales would come from domestic sales, and 30 percent from exports in 2008. This was just opposite the performance in 2007.
PROSPECT
"As the worldwide financial crisis worsens, China will be confronted with bigger challenges in 2009 to stabilize foreign trade," said Commerce Minister Chen Deming.
Chen cited further shrinkage in demand from the United States, European Union and Japan, where economies had plunged into recession due to trade protectionism and increased trade frictions.
But others have seen some positive factors. Zheng estimated "The hardest day may have passed," looking optimistically at his product logo in an interview with Xinhua.
In Zheng's view, export-oriented enterprises will meet smaller cost pressures in 2009. This was attributed to China's continuous rise of export tax rebates in 2008. Garment exports enjoy a 14 percent rebate at the end of 2008, compared with 11 percent on August 1 and 13 percent on November 1.
In addition to raising tax rebates for exporters, China made policies to encourage upgrading processing trade, and has taken measures to ensure credit extension for smaller businesses.
Meanwhile, China's exports of daily-use consumer goods are still competitive in international markets, and there is potential for trade growth with emerging markets and developing nations, said Zheng.
To help small and medium-sized enterprises raise funds and improve cash flow, the State Administration of Foreign Exchange (SAFE) raised exporters' advances on foreign-currency payments to 25 percent in late December from the previous 10 percent.
SAFE official Cai Qiusheng said "Enterprises that have good credit and haven't violated any foreign-exchange regulations can qualify for the new limits. The financial crisis has caused difficulties for many enterprises and this move would give them more operating capital."
Zheng also saw growing competitiveness from continuous depreciation of RMB, China's currency.
China will not hinge upon depreciation of RMB to expand exports, said Commerce Minister Chen Deming.
"Given shrinking demand from abroad, the effect of export stimulation through currency depreciation is rather limited," said Chen.
Zheng is set to mainly rely on domestic sales in 2009. "But I will not give up export, since I have been in the sector for so many years. This time, I will tap the world market with my own brands."
Source:Xinhua