Tuesday, August 3, 2010

Why does China make overseas compared to the domestic small advantage

    From the author's point of view, China makes the commodity in overseas compared to domestic sells cheaply, is mainly as a result of the following several aspect reason: First, the connection transaction causes the Chinese commodity to present the special price difference. It is well known, China's trade export enterprise is very special community, 30% trade export enterprise belongs to the furnished raw material processing enterprise, 40% trade export enterprise concentrates in the coastal area. What these enterprises implement is two foreign trade policy - - major part raw material from beyond the border; Major part products outlet beyond the border. This kind of special foreign trade pattern had decided many trade export enterprise produces the product is unable to enter the Chinese domestic market radically. Take the notebook as the example, although sets up in the Chinese Dongguan's enterprise produces the newest notebook, but beyond the border, these notebook's core part from beyond the border, the product exports completely, purchases the notebook in the Chinese market certainly compared to purchase the notebook in the US to want expensively many.


    Certainly, the trade export enterprise does not want to earn the high quota profit by no means in the external market, but, will do this will cause the product the competitive power drop. When raw material overwhelming majority from foreign Affiliated enterprise's time, the Foreign trade enterprise foreign Affiliate company has already earned the rich profit from raw material price export aspect. In order to dodge China's customs duty, these trade export enterprise in the sign the export contract time, desperately undercut price, as the matter stands, may also guarantee that the foreign import enterprise has the enough profit space, simultaneously may also reduce the trade export enterprise's cost, reduces in the Chinese domestic payment tax money. However, these enterprises produce the product domestic sells in China, the trade export enterprise's Affiliate company is unable to obtain the enough connection transaction profit, therefore, they can not but enhance the product the price. This is the Foreign trade enterprise the export commodity price compared to the China domestic low-cost basic reason.


    Next, the Chinese market is a division of vertical market, the enterprise product enters the domestic market to need to pay the huge transaction cost. For example, an enterprise's product enters the domestic supermarket, not only needs to pay the basic expense, moreover must pay each kind of load earnest money. Now, our country large-scale city's supermarket, the overwhelming majority belongs to the Chinese-foreign joint venture or the Foreign invested company, they through the establishment trade threshold, limit some enterprise product in local to sell. If the enterprise wants to enter their marketing channel, must pay the sales revenue 15% to 20% expenses, the Production enterprise which just started regarding these, is burden which basic is unable to withstand. Not only that some Local authority to support the local enterprise, also artificial establishes some trade threshold, forbids the outside areas enterprise product to enter local sells. Many enterprises to develop the product marketing channel, can not but writes an essay on the sales way and the transaction cost, through direct or indirect way payment discount, commission, guaranteed that the enterprise can in domestic form the sales network. In recent years, our country strengthened to the retail market supervision, forbids some large-scale Retail business collection basic expense. Therefore, some comprehensive large-scale Retail business, adopts hires the counter or the Production enterprise bringing marketing way, passes the burden the sales burden to the Production enterprise. Under such trade pattern, the part Production enterprise can not but give up the domestic market, transfers seeks trade export the channel. Enterprise product in foreign sales, although increased the transportation cost, but, actually may reduce the transaction cost large scale, therefore, these enterprises produce product in foreign sales price instead compared to domestic small advantage.


    Third, the financial environment is also causes China to make the foreign value compared to the domestic cheap substantial clause. The trade may divide into the cargo on the whole to ship settles accounts two links with the fund. Because China domestic lacks the good credit environment, cannot settle accounts the phenomenon universal occurrence which on time or repudiate a debt, therefore, domestic is engaged in the trade in China faced with the huge credit risks. The bank to reduce own risk, often is own calculating in the fund settlement aspect, this causes the loans which many should pay originally, is temporarily stopped as a result of the financial enterprise's reason. Is engaged in the international trade, although also has the huge credit risks, but, because various countries observe the trade agreement and the business practice generally, therefore, the financial risk instead has compared to the domestic trade reduces. Looking from the industrial chain link, because the Foreign trade enterprise mostly plays processor's role, therefore, does not have the credit risks nearly in the export trade domain. In other words, the export order from overseas, processing raw material from overseas, the settlement fund mainly uses in purchasing raw material, therefore, the financial link's transaction cost is relatively small. Many export trades in fact are between some overseas family group enterprise's transactions, therefore, simply has not settled accounts the risk the question. Because export trade's financial risk is relatively small, but domestic trade's financial cost is relatively big, therefore, causes the trade export product objectively in the foreign sales price compared to the domestic small advantage.


    Fourth, because the Chinese domestic existence State-owned business monopolizes the management the phenomenon, therefore, the partial products or the service domestic price is higher than the foreign price by far.


    Fifth, is also not allow to neglect, China unique tax system, is also a reason. Our country has not only promulgated the three investments law of enterprise, and has drawn up the name many tax preference measure in view of the Three Funds Enterprises. Many Three Funds Enterprises are engaged in the trade export management, they enjoy China domestic each favorable treatment at the same time, on the other hand through connection transaction, escape country tax revenue. The China Enterprise is already unable to enjoy Three Funds Enterprises' each favorable treatment, simultaneously cannot through the connection transaction circumvention country tax revenue, therefore, the China Enterprise produces the product in the Chinese domestic sale's price must naturally compared to the Three Funds Enterprises in the Chinese foreign sale price high many. This is one kind of fair competition, is one kind of special trade discrimination.


    Analyzes this phenomenon how many some helplesses. China's reform and open policy mostly belongs to the gradual product, behind is hiding the very complex politics, the economy, the diplomatic factor. Now our country is being in the organizational reform the adjustment time, the country must revise the trade export policy, carefully examines our country's market competition environment comprehensively, for enterprise fair competition establishment good law platform. Otherwise, the Chinese product will face more and more counter-dumping in the foreign market, the counter-subsidy will accuse, the Chinese government stimulation domestic market demand's macroeconomic regulation and control policy will be very also difficult to land on feet.

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