Canadian Trade Order "Southeast Flight" Promotes Structural Adjustment
Http://www.texindex.com.cn/International Business Bulletin, 4 May 2014, 11:06
Under the combined effect of many factors, many processing trade orders are transferring to Southeast Asian countries such as Vietnam. However, experts believe that this trend is an inevitable phenomenon under the background of China's trade restructuring, and it is not a bad thing for China.
Vietnamese media recently reported that the long-term trade deficit between Vietnam and China has attracted the attention of the Vietnamese industry, and Vietnam is taking measures to change this situation. In addition, the EU's latest Generalized Tariff Preferential Policy (GSP) stipulates that since January 1, 2014, Vietnamese goods, including shoes and hats, enjoy GSP tariff preferences. At the same time, China, India and other countries were abolished.
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Under the combined effect of many factors, many processing trade orders are transferring to Southeast Asian countries such as Vietnam. However, experts believe that this trend is an inevitable phenomenon under the background of China's trade restructuring, and it is not a bad thing for China.
Vietnamese media recently reported that the long-term trade deficit between Vietnam and China has attracted the attention of the Vietnamese industry, and Vietnam is taking measures to change this situation. In addition, the EU's latest Generalized Tariff Preferential Policy (GSP) stipulates that since January 1, 2014, Vietnamese goods, including shoes and hats, enjoy GSP tariff preferences. At the same time, China, India and other countries were abolished.
In this regard, the industry interviewed by reporters from the International Business Journal believes that with the rising cost of raw materials and human resources in China, it is not uncommon for more and more manufacturing industries to begin to transfer to Vietnam, Laos and other Southeast Asian countries. The introduction of the new regulation may prompt more Chinese processing trade enterprises to transfer. But this is the inevitable trend of China's trade structure adjustment. It is not necessarily a bad thing for China, and it will not change the current situation of the trade deficit between Vietnam and China in the short term.
Processing trade transfer is normal-nbsp;
According to the Ministry of Industry and Trade of Vietnam, from 2014 to 2016, GSP will bring more opportunities to Vietnamese enterprises. According to GSP, in 2014, Vietnam's footwear export tariffs to the EU will be reduced from 8-17% to 4.5%. This means that Vietnam's textile, aquatic, plastic and footwear products will further expand their export advantages to the EU. & With the rising cost of manpower and raw materials, coupled with the need for transformation and upgrading of domestic trade, the proportion of processing trade declines and flows to low-cost countries are normal. The preferential tariff policy is inclined to Vietnam and other countries, which does not exclude some enterprises facing the EU market migrating to Vietnam for the purpose of maximizing their interests. & Jin Baisong, deputy director of China Trade Research Department, Ministry of Commerce Academy, told International Business Daily.
But Kimbersong also said that this is not a bad thing for our country. Processing trade belongs to the low-end industry. The withdrawal of such enterprises is conducive to optimizing the domestic economic and industrial structure and promoting domestic enterprises to extend to the middle and high-end of the industrial chain so as to obtain higher added value.
Cai Jiaxiang, vice president of China Association of Foreign Trade and Economic Cooperation Enterprises, also told reporters of International Business Daily that processing trade was born to cope with the shortage of commodities in the domestic market. Now the domestic manufacturing industry is growing steadily and can meet the domestic demand. From the cost point of view, it is not cost-effective for foreign-funded enterprises to engage in processing trade in China. Transfer is an inevitable trend.
The head of a processing trade enterprise in Zhejiang told reporters that in recent years, export profits of his industry have declined more and more rapidly, and gross profit has dropped from 10% 20 years ago to less than 3%.
The trade deficit between China and Vietnam will remain unchanged-nbsp;
According to the latest data from the Vietnamese General Bureau of Statistics, the total trade volume between Vietnam and China in 2013 was about US$50 billion, an increase of 21% over the same period last year. Among them, Vietnam's exports to China amounted to about US$13.1 billion, an increase of 2.1%. According to the new EU regulations, Vietnamese products imported from ASEAN account for more than 50% of exports to the EU, in order to enjoy preferential tariff policies. However, most of the raw materials in Vietnam's textile and chemical industries are imported from China. In recent years, Vietnamese insiders have repeatedly stressed that measures should be taken to change the trade deficit between Vietnam and China.
Some insiders said that from the structural point of view, Vietnam mainly exports raw materials with low economic value to China and imports finished products with high economic value from China. This phenomenon shows that Vietnam's manufacturing industry is relatively backward and difficult to change in the short term.
Kimbersong agrees. He said that the transfer of China's processing trade to Vietnam would improve its manufacturing level to a certain extent, but because Vietnam's current economic level is still low, development still needs a process, so reversing the trade deficit with China is impossible in the short term. & The biggest problem in Vietnam now is the lack of manufacturing talent, the strong domestic demand for rising wages, the continuous strikes, and the labor environment to be improved. & rdquo; said Kimbersong.
Kimbersong believes that in order to improve Vietnam's manufacturing level, it is imperative for Vietnam to set up relevant courses in universities, train professional talents, and let these talents play a key role in enterprises.