China's low-price export trade is actually the current situation of the development of China's processing trade and three-to-one trade. In the environment of strong demand generated by global economic expansion, my country's human resource advantages and large-scale production advantages have gradually been reflected. In recent years, processing trade has been in full swing in China, accounting for more than 60% of foreign trade and becoming the largest contributor to the trade surplus. And this momentum will continue in the short term. However, at present, my country's processing trade mainly focuses on OEM production, so it is necessary to analyze the pros and cons of low-price exports, or the pros and cons of OEM trade and its impact on Chinese enterprises. 1. Analysis of the pros and cons of producer companies Advantages of producer companies Compared with buyers, the supplier is in a relatively passive position. However, it is still profitable to adopt the OEM method. (1) Enter the international market and participate in international competition. In recent years, competition in domestic home appliance and other industries has become increasingly fierce, and the market has become saturated. In order to expand the market, some domestic manufacturing companies have become OEMs for foreign brands. Enhanced corporate global awareness. (2) Scale production and cost reduction: There is a widespread economy of scale effect in modern production, that is, as the scale of output expands, unit costs show a downward trend. This may come from the deepening of specialized division of labor and the sharing of fixed costs. If the enterprise itself has excess production capacity, the effect of cost reduction will be more obvious. Participating in OEM supply means the expansion of output scale, which not only increases product sales, but also reduces costs. (3) Learn from experience and improve management. Enterprises that provide OEM often play an important role in the product supply chain of OEM buyers. OEM buyers can have strong capabilities in production management, marketing, product development, etc. During the cooperation process , OEM suppliers can organize production according to the purchaser's requirements in terms of product quality control, success control, operating efficiency control, etc., and improve the management level of the enterprise with advanced organizational control and experience accumulation from "learning by doing". (4) Product innovation and capability improvement. If the OEM product is an innovative product, the supplier company can not only meet the needs of the buyer, but also sell it in domestic and foreign markets under its own brand. Either increase the length of the product line and launch new products; or deepen the depth of the product line and increase the variety of existing products. In any case, it increases the competitiveness of the company. For buyers and sellers, the OEM method not only enjoys the overall competitive advantage of the product, but also has one of the most distinctive advantages, which is the flexibility of buyers and sellers to enter and exit the market. The contract can be terminated at any time whenever either party discovers a more profitable route. From this perspective, the OEM market is highly efficient. (5) Saving sales investment When an enterprise faces foreign markets, it is difficult to establish a completely independent distribution network due to the wide geographical area and different business habits of various countries. But it would be much more convenient if we borrowed the sales force of foreign companies. For example, Fujifilm, Ricoh, etc. have adopted the OEM method for their manufacturers and brokers in Europe and the United States, which reduces the friction between enterprises during operation, reduces the large amount of sales funds that enterprises should invest, and enables enterprises to adapt to overseas operations. 2. Disadvantages of production-side enterprises Most of China's enterprises engaged in processing, production and export were developed in the context of industrial transfer from developed countries. Therefore, most of their markets are overseas. Now, with the decline of labor cost advantage and the expansion of industry production scale, such enterprises are generally facing problems such as declining profit margins and slowed development speed. Many enterprises are making secondary development attempts. However, when such companies think about and try strategic development, there are three undesirable symptoms lurking that require urgent attention. (1) Scale expansion—weakness behind growth. Some processing and export-oriented enterprises have recognized the traps of diversified development and have made it clear that at this stage they will continue to seek development within the original industry and not engage in diversification. Regarding how to seek development within the original industry, the answers given by senior managers of these companies are almost always “expanding production scale.” However, as domestic labor costs rise, the production profits of processing and export-oriented enterprises tend to decline, and the competitive position of the production link in the industrial chain also tends to decline; on the contrary, the profit margin and competitive position of the market link are relatively rising - ——This phenomenon will occur after all industries develop to a certain stage.
For example, the home appliance industry has encountered this situation in the past few years, forcing home appliance manufacturers to finally implement a market integration strategy to achieve penetration and control of market segments. Although the expanded production scale can improve the company's competitive position in the industry, it does not improve its position in the industry chain, and it will also cause further dependence on market links, so the position may become more passive. When processing and export-oriented enterprises consider developing within the original industry, they cannot simply deal with the issue of expanding production scale. They need to be particularly cautious when considering the method of expanding production scale. Otherwise, not only will they not be able to improve their competitiveness, but they will also increase the risk of enterprise transformation or exit. cost. (2) Cost advantage - the weakness behind success The key to the successful development of China's processing and export-oriented enterprises lies in its significant cost advantage. Among the factors that form the cost advantage, China's comparative advantage in labor prices is the main factor. However, with the development of the domestic industry, the cost advantage of processing and export-oriented enterprises is being offset by some opposite factors: First, the labor price advantage is not sustainable for a specific enterprise. As China's economy develops, the labor force The comparative advantage of price is definitely weakening day by day. Now, due to rising labor prices, many companies have been troubled by declining profit margins; secondly, because the cost advantage derived from labor prices is the advantage of Chinese processing and export-oriented companies over similar production companies in other countries, rather than a specific Chinese company. Therefore, within the scope of domestic competitors, this overall advantage does not constitute the competitive advantage of a specific enterprise. Now, with the intensification of industry competition, the development of specific enterprises has begun to be restricted by the lack of unique competitive advantages. Obviously, for specific enterprises, they must form their own unique competitive advantages that are difficult to imitate through other means. In terms of cost, through efficient production organization capabilities, logistics system improvement capabilities, and process innovation capabilities, the cost advantages gained can continue to support the development of the enterprise. Processing and export-oriented enterprises have long relied on labor price advantages and have not paid attention to the cultivation of such capabilities. Therefore, for such processing and export-oriented enterprises, this factor that brings success has also in turn become a hidden danger for the further development of the enterprise. (3) Export agency - the heaviness behind the ease. According to a survey by Fusi Management Consulting Company, processing and export-oriented enterprises are highly dependent on foreign markets. Some enterprises rely on exports for more than 90% of their products. However, excellent export performance is accompanied by fragile or even incomplete market functions of such enterprises. The reason is that the product sales of these processing and export-oriented enterprises are not realized through the establishment of sales networks abroad by the enterprises themselves. Instead, they generally adopt the method of export agents and only deal with a few first-level agents abroad. The real market is not interested in these products. For enterprises, it is completely a "black box". The ability to grasp the ultimate market demand, establish an efficient sales network, and flexibly use different sales methods has been abandoned for a long time. Now, the profit range has begun to shift to the market link, requiring these companies to have strong market capabilities. Otherwise, their own destiny will be increasingly controlled by others in overseas markets, and the risks of survival and development will become greater and greater. . In addition, many processing and export-oriented enterprises are also preparing to explore the domestic market, which requires sufficient market capabilities. Simply using first-level agents is not enough. However, export-oriented enterprises have used export agents for a long time, which has neglected their own market functions, and the formation of market functions takes a long time. Therefore, for processing and export-oriented enterprises, agency brings benefits, but at the same time it also causes the incompleteness of the enterprise's market function. It will become a heavy "debt" for the enterprise to seek greater independent development in the next step. (4) Troubles of anti-dumping Since the cost of OEM export products is lower than that of world-famous brands, they are often subject to anti-dumping when sold in developed countries. This is because the local government protects its industry and causes Chinese companies to suffer huge losses. (5) Lack of Brands As Chinese companies process more and more ingredients for others, they have fewer and fewer of their own brands. This is a severe test for Chinese companies. Therefore, it is not a good thing to develop processing trade in the long term and use low-price exports to occupy the market and exchange for foreign exchange. This will result in a single domestic economic structure and abnormal development of the quality of the national labor force. It will also put further appreciation pressure on the RMB and give some people Reasons for the country’s foreign trade export deficit.
In essence, we still need to develop our own national industries, produce our own internationally competitive products, and create a few Chinese famous brands that can truly withstand beatings. Only in this way can our country truly transform from a big trading country to a powerful trading country. .
Hope to accept it as a satisfactory answer