Since the second half of 2010, China's four consecutive interest rate increase, mechanical and electrical products import and export trade is facing new challenges. What are the main challenges of raising the interest rate on the mechanical and electrical industry, what is the long-term impact, whether favorable adjustment of industrial structure?
October 2010, China's financial institutions has raised the benchmark deposit and lending interest rates. At present, the year Lump rate to 3.25%,glue gun one-year lending rate raised to 6.40%, are high in two years.
Bank interest rates will increase corporate financing costs, affecting import and export trade, is seen as not conducive to the mechanical and electrical products import and export enterprise financial policies. However, this rate hike, the industry's idea is different: the State in the "second five" vigorously promote the adjustment of economic structure, mechanical and electrical import and export companies want to raise interest rates to accelerate industrial restructuring to become a "catalyst."
Rate hike is "double-edged sword"
History has proved that import and export of electromechanical products for the mechanical and electrical import and export enterprises, the bank interest rate is a "double-edged sword." Enterprises may be that it hurt, glue stick it may become powerful because of it.
April 2006, China began to raise interest rates. Followed by a period of time, although the mechanical and electrical products import and export trade that is growing, but the growth rate to fall. This phenomenon shows that interest rates will affect the growth of import and export of electromechanical products.
Bank interest rate is to cause this effect it? Research Institute of the Ministry of Commerce Ministry of Foreign Trade and Economic Research, said Mei Xinyu, researcher at the rate hike decision on the impact of China's foreign trade, first, the overall demand of the Chinese economy, thereby affecting the demand for imports. "Bank interest rate increase deposit, loan interest rates, means that the rising cost of corporate finance; financing costs rise, inevitably inhibit the growth of domestic investment; investment slowed down, raw materials, energy, equipment, demand for imports would also be suppressed." He said.
The more in-depth interaction with the world economy, the impact of bank interest rate increase will be amplified more often. At present China is increasingly integrated into the international economic system, due to the increasing openness of China's economy (trade dependence over 70%), increasing weight increase (over the past few years, global economic growth impetus came mainly from two countries), China's macroeconomic The international influence economic decision-making inevitably rise.
However, the bank interest rate increase is not only a negative impact on business. Interest rates could curb investment and thus indirectly help curb the export of electromechanical products in low prices. Mei Xinyu said: "curb investment, is to curb duplication and excess production capacity, forcing enterprises to give up low prices."
The relevant statistics show that since 2006, the market supply of industrial products, has been in relative excess to the stage as the main feature. According to Mei Xinyu, a description, the Commerce Department survey confirms that 600 kinds of major consumer goods, the goods balance of supply and demand of 172 species, 428 species over-supply of goods, there is no shortage of goods; 300 kinds of main production, the over-supply or supply and demand balance 287 species.
Excess production capacity increased export power, and in order to expand exports, enterprises compete with low prices strategy. By raising interest rates to curb investment, helped to contain the expansion of exports of disorder, contain low prices. This is either the country or the enterprise, is a good thing.
From "double-edged sword" to "catalyst"
Bank rate hike, "double-edged sword" effect is still, only this time, it is more to see a positive side. In the country to vigorously promote industrial restructuring in the context of the rate hike this "double-edged sword" of structural adjustment has gradually become a "catalyst."
May 23, in China CCCME branch of solar photovoltaic products, the inaugural meeting, the reporter interviewed a Beijing Master to GD Power Equipment Technology Development Company project manager eastern nations. The company's original business of import and export of conventional trade in electrical equipment, and solar photovoltaic power generation has nothing to do. East nations that import and export of electromechanical products in view of interest rates and other challenges facing the enterprise has to adjust its business structure, to go into the new energy sector.
It is understood that there are many similar businesses. Bank interest rate increase cost pressures, which greatly promoted the development of enterprises to change the pace of ideas. China CCCME investigation proved this point. According to the survey, mechanical and electrical import and export enterprises have three major changes.
First in enterprises to increase the general trade export, OEM share significantly reduced. According to statistics, 30% of companies increased the price of OEM, equivalent to a disguised form of processing trade declined. Substantial increase in general trade, is the technological content of products to enhance and increase the number of its own brand, and master the core technology, it is people want to see.
At the same time, mechanical and electrical products structure began to diversify. There are many companies had only a single species products, and now are beginning to extend to a wider range. For example, the original company only a circuit breaker, and now may be various types of circuit breakers, and may even make the inverter products. This greatly dispersed single product variety of exposures to market risk.
The third change is the company's marketing strategy tends to be more flexible. For example, enterprises in the signing of the contract will be agreed upon price change terms, such as manufacturing costs, or decreased by 2%, product prices will readjust. Active role in this change is to enable enterprises to better understand the cruelty of the market competition will help enterprises to participate in market competition.
Shanghai Electric Transmission and Distribution Engineering Co., Ltd. technical support package, said Xu Qiang, positive restructuring, improving product technology content, and enhance market competitiveness, so that enterprises can easily cope with the pressure on banks to raise interest rates. Today in Sudan, India, Indonesia and other countries have this company's products, the bank increased interest rates caused the cost of the more easily can be passed out.
□ Further Reading
Import and export of electromechanical products and other factors
Into 2011, import and export of electromechanical products face many challenges, in addition to bank interest rate increase this important factor, there are several other factors.
First, slowing world economic recovery, weak growth in foreign demand. Since the second quarter of 2010, the United States, the European Union, Japan and other economies started to slow down economic growth, the unemployment rate is still highest in 9.8%, respectively, 10.1% and 5.1%, a direct impact on the recovery of international demand.
Second, labor, raw materials and other factors raise the cost of exports. Reflect the mechanical and electrical companies, labor costs rose 10% to 20%, and the "recruitment difficulties" led to the current production and export enterprises, the average employment gap of up to two percent or so; international commodity prices continued to rise in 2010, steel, copper and crude oil prices more than 15%, 18% and 12%.
Third, further compressing the RMB appreciation profits of exporters. This year, with U.S., EU trade surplus continues to expand unabated growth momentum and the appreciation of the renminbi or trend throughout the year.
Fourth, trade friction will be further intensified. As China overtook Germany in 2009 to become the largest exporter of mechanical and electrical products, our main export of electromechanical products, such as the United States, European Union, Latin America and other countries and regions, have mechanical and electrical products to China to take anti-dumping, countervailing and other trade remedy measures, and widely established strict quality standards and industry technical performance standards, has pushed up the threshold of China's export of electromechanical products.
□ Links
Mechanical and electrical products trade has become the hardest hit of international disputes
China's vice president of CCCME Wang Guiqing recently in "U.S. intellectual property dispute resolution involving high-level seminar", said the United States nearly 337 investigations initiated 5 years (the United States for acts of unfair import trade investigations initiated) has advanced 20 years combined, mechanical and electrical products in China has become "disastrous."
Wang Guiqing said that since 2006, survey of 337 U.S. companies suffered a significant increase of cases. Data show that in 2010, the United States launched 56 investigations from 337, representing a substantial increase in 2009 nearly doubled the cases involving a total of 18 cases in China, accounting for 32.1%, ranking the first place.
Fair Trade Ministry of Commerce Deputy Secretary Liu Danyang, our country's many enterprises, especially SMEs, by responding to practice, restrictions on financial strength, often in response to 337 surveys in a very passive position, unable to promptly and effectively to protect themselves legitimate rights and interests, and actively responding to, and enhance patent awareness, strengthen negotiation skills, etc. are to be improved.