November 2009 Archives

supply conference.JPGI recently attended the ‘Global Purchasing and Supply Chain Forum 2009’, in Tianjin on 21-22 November, a forum was organised by the China Federation of Logistic and Purchasing (CFLP) and the Institute of Supply Management. The conference drew in around 200 people, including purchasing managers from MNCs, representatives of companies both state and privately owned, logistics company managers, government officials, as well as scholars in the field of supply chain management.

Besides a discussion on the macro economy, the two main topics from the forum were:
  • Supply chain management in the environment of economic recession; and
  • Supply chain management contributions to company value

Since the value enhancing role of supply chain management is a common topic discussed at a majority of procurement forums, I was more interested in the first topic. While exchanging ideas about supply management under economic recession with other purchasing managers, I received many useful tips—including those from the speakers. One speaker was Mr. Dai Dingyi, Vice Chairman of CFLP, who introduced the status and trends of purchasing and supply management in China. He indicated that supply management in the state-owned companies remains weak and that government purchasing is marred with problems.

Mr. Johnson Xiao, Global Sourcing Director of TRW Automotive Inc, was another speaker. Mr. Xiao shared his personal experiences in service sourcing. Attendees also learned a lot from Mr. Zhang Jiamin, Director of Li & Fung Group, who gave an insightful speech on how China’s manufacturers have survived the global financial crisis and advised ways for companies to adjust their sourcing strategies.

These speeches were very insightful about the current state of supply chain management in China and about its future outlook. Although most procurement managers remained stressed by the cost reduction target now, we were encouraged and inspired by this get-together; as long as a business can survive the crisis and remain innovative, there is a bright future ahead.

Putin’s visit to China in October has brought numerous promising projects for bilateral cooperation between China and Russia. More and more Chinese companies are becoming involved in deals with Russian companies, both in exports and imports.

However, when doing business with Russian clients it is important to understand their way of thinking, especially when you are looking to sell your products on the Russian market.

From my personal experience in sourcing for Russian clients from Chinese producers, the following issues—standard with any sourcing project—must be managed: price, quality, supplier reliability, delivery time, payment terms, availability, product certification, and transportation time, etc. What are the most critical issues specific to Russian companies? The top three would have to be payment terms, product certification, and language barriers.

Language

Effective Communication is a crucial aspect of any business deal. The existence of a language barrier is a particularly formidable challenge faced by Chinese companies aiming to enter the CIS market. Effective communication will allow certainty in the decision-making process; misunderstanding, however slight, may lead to unexpected troubles or worse—failure. The simplest way to avoid these unnecessary pitfalls is to have an effective conduit between your company and the client. A few of the best ways to do this are:

1. To establish a local representative office
2. To find a solid partner in Russia
3. To hire a long-term translator in your domestic office
4. To hire a short-term translator during your client’s visit to your factories or during your trip to Russia


The listings above are ordered according to the level of importance of the prospective deal. The first option is most acceptable for a Russian client, while the third and forth options are the easiest options to use when visiting a Chinese company. Any aggressive, long term, business expansion into Russia would require a representative office in Russia or even a joint venture with a local Russian company.

To be continued
The following table shows the latest China Containerised Freight Index (CCFI), released on 20 November. The CCFI was registered as 985.6, increasing by 0.56% from 13 November. Of all the shipping lines, the index for the EUROPE SERVICE was 1585.97, which was the highest, 0.56% higher than last week. The lowest was 513.93 for the HONGKONG SERVICE, and this dropped by 2% from 13 November. The WEST EAST AFRICA SERVICE indicated the strongest growth, at 2.67%, while the growth of the MEDITERRANEAN SERVICE was 0.27%, the lowest growth rate.

The drop in the SOUTH AFRICA/SOUTH AMERICA SERVICE was particularly severe, decreasing by 2.26%. The W/C AMERICA SERVICE fell by the smallest rate, namely 0.67%. And the indexes of other shipping lines like HONGKONG SERVICE and AUSTRALIA/NEW ZEALAND SERVICE also declined, dropping by 2% and 1%, respectively.

CCFI.JPG
Source: Shanghai Shipping Exchange



The following table illustrates the China Containerised Freight Index (CCFI) which reflects the China container transportation market. It shows that the latest CCFI is 980.11, 1.04% higher than in October. Of all the shipping lines, the index for the MEDITERRANEAN SERVICE is the highest (1577.16), increasing by 4.72% from October. The lowest is 524.42 for the KOREA SERVICE, and this dropped by 3.38% from October.

The MEDITERRANEAN SERVICE has indicated the strongest growth, however, at 4.72%, while the growth of the SOUTH AFRICA/SOUTH AMERICA SERVICE was 2.26%, the lowest growth rate. The indexes of Shipping Lines like KOREA SERVICE, E/C AMERICA SERVICE, JAPAN SERVICE, W/C AMERICA SERVICE, WEST EAST AFRICA SERVICE and HONGKONG SERVICE all declined. The drop in the KOREA SERVICE was particularly severe, decreasing by 3.38%. The HONGKONG SERVICE fell by the smallest rate, namely 0.20%.

Shipping Freight Index.JPGSource: Shanghai Shipping Exchange

Building on the last post on this blog regarding protectionism, trade protectionism is now a big concern in China. Chinese GDP relied heavily on foreign trade before the financial crisis. As one of the three engines of China's GDP growth, the exporting sector has just started to recover in 2009, but it now faces the threat of protectionism. The ‘anti-dumping’ cases that some Chinese suppliers are confronting will probably not effect China’s economy and exporting sector too heavily in the big picture, but the protectionism message sent by US government from these cases is a serious concern that China needs to consider and be prepared for.

自9月初美国通过了轮胎特保案的最终裁定,对从中国进口的所有小轿车和轻型卡车轮胎征收为期三年的惩罚性关税开始,贸易保护主义的抬头开始成为国内进出口行业愈加热议的问题。事实上,轮胎特保案只是中国目前遇到的众多贸易争端之一。09年以来,中国很多行业的产品出口遭遇到了类似的问题。(如下表).

国家
美国
行业
无缝钢管
事件
继欧盟之后,美国商务部10月7日宣布对从中国进口的无缝钢管发起反倾销和反补贴税调查。此举可能导致美国对此类产品加征接近100%的新关税
时间
2009年10月7日
影响
无缝钢管可能失去全球最大出口市场

国家 欧盟
行业
无缝钢管
事件
10月6日,欧盟部长理事会发布公告称,裁定中国输欧无缝钢管对欧盟产业构成损害威胁,决定征收17.7%~39.2%的最终反倾销税。
时间
2009年10月6日
影响


国家 美国
行业
轮胎
事件
美国对中国轮胎发起的特保措施,决定对从中国进口的所有小轿车和轻型卡车轮胎实施为期三年的惩罚性关税,意味我国会损失10亿美元出口额,影响10万左右工人的就业。
时间
2009年9月11日
影响
涉案金额高达22亿美元

国家 美国
行业
油井管产品
事件
美国对中国油井管产品进行反倾销、反补贴合并调查,这是中国迄今为止遭遇最大涉案金额的贸易摩擦官司。
时间
2009年4月
影响
涉案金额高达32亿美元

国家 美国
行业
铜版纸产品
事件
美国宣布对中国出口美国的铜版纸产品征收临时反补贴税,改变了美国坚持了23年的不对非市场经济国家实施反补贴法的贸易政策。
时间
2009年3月30日
影响
涉案金额高达22亿美元

国家 印度
行业
高新技术产品
事件
印度对我国同步数据传输器发起贸易救济调查。
时间
2009年2月
影响
涉案金额为8.8亿美元

国家 印度
行业
玩具
事件
印度宣布今后6个月内将禁止进口中国玩具,浙江、广东地区的一部分玩具企业受到不少影响。
时间
2009年2月
影响
浙江、广东地区的玩具企业受到影响。


注:表中数据引自新浪财经

以上数据看起来非常惊人,但整体来说,中国进出口的走势还是在恢复中的,这些单个的反倾销案件对中国某个特定公司或行业造成的损失并不是特别影响大局。比如,根据近期中国海关公布的数据,9月PMI新出口订单指数53.3%,连续5个月超过50%并保持上升。9月季调后的新出口订单趋势53.8%,自09年1月以来持续上升。

但是受金融危机影响,国外市场的消费能力萎缩使得我国这种出口恢复还是非常缓慢。在这种背景下,以美国为代表的国家或地区实施的贸易保护主义所造成的数个反倾销案件对中国造成的心理影响恐怕远远大于经济损失。奥巴马曾在G20峰会上提出针对对美贸易顺差大国(主要是中国)的“可持续及均衡增长框架”协议。美国政府认为,全球经济的不平衡(特别是美中贸易的不平衡)与危机的发生有一定的因果关系。当然,将源自美国而祸及世界的此次危机,归于这种不平衡尤其是中美贸易的不平衡,显然是嫁祸于人的不公平做法。根据克鲁格曼的说法,金融危机的根本原因是因为“美国人花费的比他们挣的多,通过国家借债的方式把借来的钱用于修建房屋和购买消费品以及为联邦预算赤字融资”。

但无论如何,当前美国政府对于贸易逆差的态度从而有可能引发的贸易战或贸易保护主义全球化蔓延才是我们真正值得担忧的。比如近期中国商务部对美汽车产品发起的“双反”调查,也对美国的贸易保护主义明确表明了态度。

毫无疑问,此次奥巴马的访华之行会成为中美双方国内的各相关行业热切关注的事件,甚至在更大的范围内吸引全球各国的眼球。美中双方对于贸易问题的相关谈判结果会成为以后在相当长一段时期内中国的进出口景气风向标。当然早在今年年初的时候中美双方就有过类似的对话,并且没有对以后的贸易环境形成很大的冲击和影响。而这次我们也同样只能拭目以待,希望双方能够在克制的基础上达成一定共识,以更开放的态度鼓励双边甚至多边贸易的运行。而同时对于某些已经或可能受到影响的厂家和行业来说,加速技术升级换代和积极开拓多区域的国外市场无疑也是必需要准备的应对手段。
The European Union's trade commissioner, Catherine Ashton, claimed in a document released last week that despite 223 restrictive trade measures since October 2008, a protectionist worst-case scenario has been avoided, especially as the Group of 20 leaders made commitments to protect free trade. Yet a spokesman from China's Ministry of Commerce over the weekend proclaimed that China has suffered heavily from trade protectionism, which has been rising since the start of the financial crisis. And he gave some stats to back it up. In the first 9 months of the year, the spokesman said, 19 economies launched 88 probes into Chinese products, involving USD10.2 billion worth of export goods. The number of probes is up 29% compared to the same period last year, while the monetary value is up a full 125%. The 88 probes against Chinese products included 57 anti-dumping cases, nine of anti-subsidy and 15 safeguard actions and 7 cases of special protection. The spokesman particularly singled out the United States - responsible for 14 of the 88 probes with a value of USD5.84 billion, an increase of 639% y-o-y.

According to data from the WTO's Global Antidumping Database, in Q3 2009 WTO member governments initiated 44 new product level investigations in response to domestic industry requests for the imposition of import restrictions, most of these (37) occurred under a national antidumping law. The cumulative number of new requests for protection during the first three quarters of 2009 was 30.3% higher than for the same period in 2008, and China continued to be the exporting country most targeted by new investigations in Q3, facing 23 (or 62.1%) of 37 new product-level investigations. For the whole of 2008, industry demands for new import restrictions against China under these policies were up 22.7%, while a 7.8% increase is expected in 2009. Interestingly, however, in the report accompanying the data, author Chad Bown concludes that
WTO member use of trade remedies to target China's exports is not a new, crisis-related phenomenon, as it continues a trend dating back to China's WTO accession in 2001 and even earlier.
So protectionism may have been on the increase since the financial crisis - yet the targeting of Chinese exporters in this regard is nothing new. The series of anti-dumping duties recently levied in the US on imported Chinese products (notably on tires and steel pipe) have, however, caused the contentious shadow of protectionism to fall squarely over US President Obama's impending visit to China. The Chinese have countered with tariffs and investigations of their own, notably on whether cars imported from the US are being sold below market prices in China, yet surely these matters can all be talked out in a civilised manner when the two finally sit down for what is now a well overdue chat. 

EVENTS: China Forge Fair 2009

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China Forge Fair 2009

Venue:         China International Exhibition Centre, Beijing
Date:           17-19 November 2009
Organisers:  Confederation of Chinese Metal Forming Industry
Tel:              +86 (0)10 5233 8075

Briefing:
As one of the leading events in the stamping, fabricating and forging sector of China, CFF 2009 will display the latest products and technology such as forging products, forging equipment, forging tooling manufacturing materials and equipment, forging heat treatment furnace and energy saving technology, and more. The event is intended as a platform for enterprises at home and abroad to gain new leads, enhance industry standing and maintain customer relationships.  

More information.

China (Beijing) International Automobile Manufacturing and Production Facility Exposition

Venue:         China International Exhibition Centre, Beijing
Date:           11-13 November 2009
Organisers:  China Academy of Railway Sciences, MOR, China World Trade Centre Co. Ltd.
Tel:              +86 (0)10 5233 8075

Briefing:
The objective of the event is to facilitate the development of China's automobile manufacturing industry and to promote fair exchange and fair competition within the industry. The event is intended as a cooperative platform for domestic and international enterprises to establish and maintain relations with customers. 

More information.

EVENTS: Metro China 2009

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Metro China 2009

Venue:         Beijing International Exhibition Centre
Date:           10-13 November 2009
Organisers:  China Academy of Railway Sciences, MOR, China World Trade Centre Co. Ltd.
Tel:              +86 (0)10 6505 1012

Briefing:
As the largest metro show in China, Metro China 2009 is intended to be a platform for exhibitors at home and abroad to seek partners, tap market potential and conduct exchanges in the urban rail transit industry. The event will display the latest technology and equipment like urban rail vehicles, power supply and distribution, electromechanical systems and engineering and construction, etc. 

More information.

Metalworking and CNC Machine Tool Show 2009

Venue:         Shanghai New International Centre
Date:           3-7 November 2009
Organiser:    Hannover-Messe International GmbH, Hanover Milano Fairs Shanghai Ltd., Shanghai World Expo Group
Tel:              +86 (0)21 5045 6700

Briefing:
As the most internationally-recognised business event in the metal working sector of South-East China, this event attracts various industries like automobiles, defense, shipbuilding, aviation, die & mould, electric power and electronics, and more. The appeal of this event is embodied in the many pavilions organised by larger companies and associations.

More information.

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