On April 15, the 135th China Import and Export Fair (hereinafter referred to as the "Canton Fair"), known as the "foreign trade barometer", kicked off in Guangzhou. In the morning, on the subway bound for the Canton Fair, Chinese and foreign businessmen have begun to chat about business; in the exhibition hall, buyers from all over the world will be met everywhere, as if people are in a global village, and the tide of global economic and trade cooperation is mighty.
Behind the hot popularity, a number of relevant persons in charge of mechanical and electrical export enterprises told the first financial reporter that the uncertainties faced by exports have increased: the conflict between Russia and Ukraine, geopolitics, trade protection, the rise and fall of raw material costs, and the Red Sea crisis...... In order to compete for orders, export competition has become more fierce this year. Large and small enterprises are moving towards a more rational division of labor. Innovation is the best way to deal with uncertainty.
The new quality of productivity has attracted hot popularity
Compared with previous years, more innovative products have emerged at this Canton Fair.
China's new quality productivity, which is characterized by high technology, high efficiency and high quality, has attracted even more popularity. A brain-computer interface technology company that participated in the Canton Fair for the first time has attracted countless attention, which is a microcosm. A bionic hand with brain-computer interface technology, the cost is controlled through localized alternatives, and the price is only about one-fifth of that of similar products of imported brands. At the scene, a number of businessmen from Europe, America and the Middle East proposed the intention of being overseas agents.
At the booth, when Zhou Jian, a young man born in the "post-00s", used his "mind" to control the five fingers of his right prosthetic leg and played a melodious song "Waves of Gulangyu" on the electronic piano, attracting many exhibitors to stop and watch. His company, Strong Brain Technology, independently developed an intelligent bionic hand, and it took five years from concept to product prototype. The principle is to capture and read the signals of the arms muscles and nerves, and use the AI algorithm to reverse the person's movement intention and turn it into a signal to control the bionic hand.
Han Bicheng, founder and CEO of Strong Brain Technology, told the first financial reporter that brain-computer interface technology has a history of 100 years, and it is now entering a critical moment, moving from the laboratory to the real world and having an impact, because materials science, algorithms, etc. are slowly maturing, and it can solve real problems. People with impaired hands and feet or motor impairments can use this technology to live like a normal person. The technology can also improve sleep and intervene in autism.
"China's mature production process has accelerated the commercialization of brain-computer interface products. Han Bicheng founded Strong Brain Technology in 2015, the company is currently headquartered in Hangzhou, has sales business in Europe and the United States, and hopes to expand overseas markets through the Canton Fair.
At Gree's booth, a Brazilian businessman told reporters that he has cooperated with Chinese companies for more than 20 years. The businessman sells 700,000 air conditioners a year in Brazil, most of which are sourced from Chinese companies, such as the Gree factory in Brazil, where the main parts are exported from China. In addition, there are some high-end air conditioners and commercial air conditioners that need to be imported from China. In recent years, Brazil has become more and more energy-saving for air conditioners, and this time he went to China to purchase more energy-efficient and smarter products. According to Gree Electric Appliances, the best export is energy-saving products, and Brazilian customers come to see new products and seek to expand cooperation.
Cleaning appliances are also one of the most popular products for export in recent years. The reporter saw at the booth of Ecovacs Group that several Indian buyers were interested in an integrated sweeping robot with a mother machine and a child machine, and they also went to feel the movable robotic arm of the sweeping robot. The group's Timco brand launched carpet washers for overseas markets, attracting many European and American buyers. "Product innovation, technological innovation, not putting all your eggs in one basket, continue to promote globalization. Leng Ling, president of Timke, told the first financial reporter.
Uncertainty in foreign trade and exports has increased
A large number of OEM export enterprises also participated in this Canton Fair, such as the Chamber of Commerce for Import and Export of Shunde District, Foshan City, which set up a display area for small and medium-sized OEM export enterprises. A number of companies told reporters that the uncertainty faced by exports this year has increased, and they are actively responding.
"70% of the world's gas water heaters and 50% of gas stoves are produced in Shunde and Zhongshan. Harvey, who is doing ODM export of gas appliances in Ronggui, Shunde, told reporters that there are more customers in overseas emerging markets this year, and the export volume of gas appliances of his company is flat year-on-year. Affected by the economic environment, consumption in overseas markets has been downgraded and average prices have declined. The company's response is to innovate products, such as nano coatings, on the one hand, and expand into more overseas emerging markets on the other.
From the perspective of the macro environment, export policies, banking and insurance are favorable, such as interest rate cuts, and export credit insurance is more convenient. However, there are also a lot of new challenges. For example, Harvey said that after the Red Sea crisis this year, the sea freight from China to a container in Europe rose from 2,000~3,000 US dollars to 6,000~7,000 US dollars. Affected by external factors, the payment collection of some customers in Russia has been extended from three days to three weeks. Since 2020, the price of copper has continued to rise from 40,000~50,000 yuan per ton, and has recently risen to 76,000~77,000 yuan.
"There has been a lot of uncertainty this year. Harvey said that the European and American markets account for half of their business, while the Russian market accounts for less than 10 percent, and the rest comes from overseas emerging markets. "This year, we will focus on expanding the markets along the 'Belt and Road'. Consumption in the European and American markets is downgraded, prices in the Southeast Asian market are low, and orders in the Middle East market are relatively fragmented, and we plan to expand the CIS market. ”
At present, everyone is grabbing orders, and competition is intensifying. Harvey told reporters that their export prices were under downward pressure. Because the price of steel is falling, from 4300~4400 yuan per ton to 3400~3500 yuan, some gas water heaters have changed from copper water tanks to stainless steel water tanks. They also strive to receive some differentiated orders, such as thousands of gas water heaters of a certain color, which large enterprises may not do, but they are willing to take orders. "Looking at the policy orientation in 2024, it's a big deal to do less, but to survive. ”
"There is an increase in exports this year, but uncertainty has increased. A relevant person from a medium-sized enterprise in Shunde said that the uncertainty comes from geopolitics, trade protection, international relations, etc. Amid uncertainty, in the first quarter of this year, the company's exports maintained growth. Because overseas inventories have been digested, merchants still have to buy, and home appliances are necessities. However, the Red Sea crisis and other events have increased shipping costs. In the end, manufacturing companies will "fight for endurance" to see who has more cost digestion ability, and they will use new products to grab orders.
Zhu Xiaomei, chief marketing officer of Xinbao overseas, also told Yicai that international geopolitics has brought uncertainty, "We are like a drop in the sea, affected by the sea (international relations)." "The goods pass through the Red Sea, which takes a little longer and the freight is more expensive. Everyone cherishes the orders and business that can be done, cherishes the market that is still open, and will do their best. "Market diversification is our strategy, and even if some markets are affected, other markets are still growing, so we have been growing steadily. She said that Xinbao's product line will also be further enriched, extending from small kitchen appliances to cleaning appliances.
Due to the lack of orders in the first two years of some factories, there is pressure to survive this year, and they are fighting for prices in order to grab orders. Zhu Xiaomei said that the average price of the industry this year is lower than last year, and it is unsustainable to simply spell low prices. Customers are also willing to find stable suppliers without worrying about after-sales problems. A Hong Kong, China buyer at Xinbao's booth told reporters that she came to select goods for German supermarkets. The past two years have not been good, and the European economy is expected to recover in 2025. It takes seven or eight months from the time the order is placed to the time the shipment arrives in Europe, and she is now placing the order according to the forecast for 2025.
Innovate for more certainty
According to the data provided by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products to Yicai, in January ~ February 2024, China's white goods exports were 19.2 billion US dollars, a year-on-year increase of 18.8%, a record high. From a regional point of view, exports to traditional markets have recovered: exports to the United States increased by 12.1% year-on-year in January ~ February, and exports to the EU27 countries and the United Kingdom increased by 13.9% year-on-year. Exports to emerging markets are still growing: exports to Latin America increased by 56.4% year-on-year in January ~ February, exports to Africa increased by 40% year-on-year, and exports to ASEAN increased by 24.4% year-on-year.
There are obviously three reasons for the export growth at the beginning of 2024: first, Chinese enterprises have increased their efforts to develop the global market, second, the fluctuation of international shipping costs caused by the Red Sea crisis and the expectation of the United States raising Section 301 tariffs have led some foreign customers to purchase and stock up in advance, and in addition, the low base of exports in the same period in 2023 is also one of the reasons for the higher growth rate this year.
According to the research of the Mechanical and Electrical Chamber of Commerce, the orders in hand of enterprises in April still increased to varying degrees compared with the same period last year, and it is expected that China's white goods exports in the first half of 2024 will exceed the historical high of the same period in 2021 and are expected to reach a new high.
The first financial reporter felt at the Canton Fair that Chinese enterprises responded to changes in the outside world with different dimensions of innovation and sought more certainty for export growth.
Liu Tangzhi, vice chairman of the board of directors of Skyworth Group, said that in the face of increasingly fierce competition, Skyworth has stabilized export prices with differentiated products, such as refrigerators with customizable appearances, safety monitors with touch screens, and mini washing machines for mothers and infants. Since the beginning of this year, Skyworth's white goods exports have maintained double-digit growth.
Business models are also changing. The person in charge of Skyworth air conditioning revealed that it will look for partners in Egypt this year. Skyworth will strengthen the investment in parts and molds, and carry out the production, sales and service of the whole machine in combination with the customer's localization plan. "Egypt's import tariffs on complete machines are very high, and there are certain tariff preferences for the import of loose parts. In the face of high tariffs, there is an irreversible trend of setting up factories overseas or strengthening cooperation with local enterprises. In the future, there will be more similar cooperation in Argentina, Brazil, Indonesia, Nigeria and other markets. ”
China's supply chain is forming a new ecology of interaction at home and abroad, and complementarity of large and small enterprises. Haier, Midea, Hisense and other large groups continued to deepen their global supply chain layout this year, promoting global R&D collaboration and overseas localized operations. Like the new washing machine and dryer combination displayed by Haier Smart Home at the Canton Fair, the hardware, motor, energy saving, and fresh air are developed and designed by R&D centers in China, Australia, Europe, and the United States, and are manufactured in China. This time, Midea showcased overseas green smart products, such as household air conditioners linked to heat pumps and home energy management systems. "In the globalization of Midea, localization is the most important, and research, production and marketing must be localized. Zhou Zhiwen, general manager of overseas sales of Midea Group's household air conditioning division, once told reporters.
"The format of the Canton Fair has changed, and it is no longer a simple mode of selling goods in the past. A Hisense exhibitor told reporters that Hisense used smart laundry, smart kitchen and other different scenes to display new technologies and new products. China's leading home appliance companies are highlighting the image and strength of green and intelligent. "The threshold for our cooperation has also been raised, mainly with leading buyers. ”
"Despite trade protection, what we see at the Canton Fair is more of a business opportunity for foreign trade cooperation. Zhou Nan, secretary general of the Household Appliances Branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, told the first financial reporter that Chinese enterprises have integrated into the global industrial chain in various forms. Enterprises have also stepped up their efforts to innovate and use innovation to create new demand. "On the surface, Europe, the Americas, and Asia each have an industrial chain, but in fact, the three chains are interrelated, and the world cannot do without China. ”
(This article is from Yicai)