By Jian Cui

 

Beijing, China.- April 21. 2008 - As we all know, it has become an indisputable fact that RMB VS US Dollar breached 7 mark and it aroused widespread concern through out the whole world. While what influence will the historic change bring to China’s economy? Industry experts pointed out that adjustment of exchange rate belongs to expenditure conversion policy. It directly determines the life of a national foreign trade enterprise, and we can even say that it directly influence the products’ international competitiveness of the country. And continuously rapid currency appreciation will surely become a deathblow to the country’s foreign trade enterprises. Twenty years ago, rapid development of Japan’s economy made nearly all Americans exclaimed: Japan is buying America. However, it didn’t last long. From April 1993, new American president Clinton carried out a series of appreciation pursuit operation to yen. Exchange rate of yen against US dollar had been raised all the way from 120:1 in 1993 to 80:1 in 1995. And the result was that Japanese lamented: currency appreciation made Japan suffer more even than the Second World War!

 

History repeats itself and there are always surprisingly similar periods in the history. On 10^th April, 2008, RMB broke “7” in exchange rate against US dollar, making a new record since the exchange rate reform by 6.9920. It undoubtedly cast a heavy bomb to China’s foreign trade enterprises. 30 years of reform and opening up policy has helped spread the logo of “MADE IN CHINA” through out the world, but now the manufacturing industry in China, especially the export-oriented manufacturing enterprises are facing a deadly disaster with all the unfavorable factors like RMB currency appreciation, US subprime mortgage crisis, export-tax rebates reduction, rising labor cost and other production cost, quality issues of Made-In-China products frequent the world news headlines, etc.

 

RMB appreciation is a good thing in a certain sense. It has rather positive effect to correct the unbalance of China’s economy at a higher level, to ease the pressure of trade surplus and overheated economy as well as to create more higher-quality industries. However for China’s traditional industries, the negative effects of RMB appreciation is not merely a keenly-felt pain, it also led significant price jump of domestic materials and continuous increase of enterprises’ production and operation cost. Statistics from webtextiles.com shows that the production cost of the textile industry has risen 10£¥ largely due to a series of factors such as rapid RMB appreciation, skyrocketing of raw and processed materials cost and so on. Consequently it’s hard for Chinese enterprises to survive with no price increase. But the direct result of such price hike is that the original price advantage of “MADE IN CHINA” products will not be appealing to other countries any more. It is definitely a direct hit to Chinese enterprises when they are still at the preliminary stage cultivating the overseas market.

 

Faced with such dilemma, Chinese enterprises had to seek ways to walk out of the quagmire. Some plan to transfer their production bases while others ditch the export business and resort to domestic trade. These measures may be a kind of business strategy for a single enterprise, but for the whole industry it brings about only a temporary solution, and does not offer a real solution. Moreover, just like a big ship is hard to turn around, the huge operation cost forced many of the enterprise balk and some even quit and closed their business. In this case, the emerging B2B e-commerce becomes the inevitable choice for these enterprises. As one of the top 3 domestic B2B service providers, Guo Fansheng, CEO of HC360, believed that to face the negative impact brought by exchange rate fluctuations the most important thing for an enterprise is to stay optimistic and keep calm.

 

B2B e-commerce can eliminate lots of businesslike procedures and management cost in trading between enterprises so as to reduce the operation cost of an enterprise. The convenience and extension of network enlarges the scope of activities of enterprises and makes it more convenient and low-cost for a cross-region or cross-nation enterprise. At the same time, B2B becomes the basic of strategic cooperation between enterprises. Enterprises can establish mutually complementary and beneficial cooperation through internet on marketing, products, operation and other aspects, forming horizontal or vertical forms of business integration, to achieve in deed the aim of global management with larger scale, more powerful strength and more economic operation. Most of the e-commerce services only depend on the Internet only, but is not that cost-effective, under this scenario, MadeInChina.com offers a new solution by offering a total package service of “Shows+Journals +Internet”, dubbed as the three-dimensional B2B service model.

 

According to MadeInChina.com, industry shows and industry-specific trade journals are two of the basic marketing channels for Chinese enterprises. Its exclusive three-dimensional “Shows+ Journals +Internet” B2B service model offers Chinese enterprises just what they need in terms of international marketing. In addition to marketing its members through its own platform, MadeInChina.com also publishes various trade journals covering enterprises and products information, enterprises brochures, VCD to present is members as well as to provide professional service as information consultation, inquiry matching and trade leads matching.

 

The three-dimensional “Shows+Journals+Internet” service model of MadeInChina.com won widely approval from foreign trade enterprises as many enterprises are jumping on the global trade wagon. MadeInChina.com take thousands of its members to more than 40 top global industry shows as well as more than 200 main domestic industry shows to help China’s enterprises overcome the trade crisis. This March and April, within two months, MadeInChina.com participated in six large international shows: Conexpo-Con/Agg, 2008 Frankfurt Prolight+Sound, 2008 WETEX, 2008 ISC Expo, NAB2008 and the 103^rd Canton Fair.

 

RMB broke “7” in exchange rate against US dollar is definitely heartbreaking news for China manufacturers. According to media reports, Pearl River Delta in Guang Dong Province is suffering unprecedented pain of transfer: hundreds of shoe factories are closed and tens of thousands of Hong Kong enterprises there are nearly to close and more large medium and small size enterprises are planning to move out. The then Avan Guard of China’s new economy is becoming history. RMB appreciation affects enterprises not only in Guang Dong Province, but also other manufacturer-dense regions.

 

Although the three-dimensional “Shows+Journals+Internet” B2B service mode can not totally solve the foreign trade crisis China’s enterprises are facing now, it provides a low-cost but high-efficient way to help a vast majority of SMEs to walk out of the country. The next decade of internet is a decade of e-commerce and we believe that with the help of MadeInChina.com, Chinese enterprises will surely break the ice made by RMB appreciation and sail forward to the world.  

 

 

As a leading B2B E-commerce export service provider in China, MadeInChina.com provides a B2B online marketing platform for both Chinese enterprises and global buyers.

Based on HC International’s 15 years of B2B E-commerce service experience of 5 million users in over 64 industries, MadeInChina.com provides large variety of on-line and off-line integrative international trade service for Chinese suppliers and global buyers, such as supplier recommendation, promotion in global exhibitions and business matching, by the advanced information service techs (e.g. on-line searching and multidimensional exhibition) and the strict 3rd-party authentication system.

With an experienced and professional team, MadeInChina.com provides the most update and top-quality service in the market for Chinese suppliers and global buyers.