New risks in Zhejiang’s textile industry’s export collection are on the rise

In 2014, the overall development of Haining’s foreign trade was stable, but the risk of export foreign exchange collection remained high. According to statistics from China Credit Insurance Corporation Jiaxing Office, a total of 41 export companies reported cases in 2014, with a total of 68 cases. The amount involved exceeded US$7.01 million, among which the textile industry became the industry with the highest reported losses. The textile industry (mainly warp knitting) became the industry with the highest reported losses in Haining City. There were 22 reported losses throughout the year, with the reported losses reaching 240 million. million US dollars, a significant increase compared with the previous year. Among them, there were 9 buyer rejection cases, accounting for 41% of the total cases in the industry. The new risk points are mainly concentrated in the following two aspects:
First, the turbulent international situation has caused the risk of export exchange collection to continue to rise. Affected by factors such as falling oil prices, capital turmoil, and rising geopolitical risks, many emerging market countries, such as Russia and many South American countries, have encountered varying degrees of exchange rate depreciation, economic decline and other problems, resulting in a decline in buyers’ willingness to pay and ability to pay. , which directly increases the export risk of the textile industry. In terms of countries reporting losses, the United States still ranks first, with a reported loss amount of US$1.93 million, followed by Canada, Italy, Mexico, Australia, Turkey, Saudi Arabia, and Brazil. From the perspective of the causes of losses, the amount of reported losses caused by the buyer’s default in payment in 2014 amounted to US$6.06 million, accounting for over 86%, and was concentrated in European and American countries. On the other hand, the risk of buyer rejection continues to rise. In 2014, there were 15 damage reports caused by the rejection of goods, a year-on-year increase of 36%, accounting for 22% of all damage reports, and a significant year-on-year increase of 80%. These cases are mainly concentrated in emerging markets such as Russia, Turkey, Mexico, Brazil, and Argentina. Among them, exchange rate fluctuations and trade control policies in some countries are the main reasons for the high risk of rejection, such as Mexico and Brazil.
Second, new trade risks are increasing. According to statistics from the China Credit Insurance Corporation Jiaxing Office, “hacker” cases increased in 2014. One form of this type of case is to collect the email information of export companies or foreign customers through the Internet, hack into one party’s email, and require the payment to be transferred to the changed bank account on the grounds of changing the bank and account number. Another form is to set up a third-party email address that is very similar to the exporter’s to take advantage of the company’s negligence and commit fraud. Losses last year amounted to hundreds of thousands of dollars. There are also new trade risks arising from offshore buyers. Many large foreign group buyers conduct offshore procurement by establishing procurement companies in third countries. These offshore buyers generally have a short establishment time and small registered capital. Due to the independent legal status of the purchasing company, once the offshore buyer goes bankrupt or defaults on payment, the parent company will not bear joint and several liability, and the rights and interests of the export enterprise cannot be protected. The registration places of offshore buyers where such cases are frequent are concentrated in the United Arab Emirates, Cyprus, Hong Kong, etc. In addition, cases of “middlemen” pretending to be other legally registered companies to place orders with export companies to defraud goods also occur from time to time.
Therefore, it is recommended that: first, export enterprises should first do a good job in risk assessment of old buyers and large buyers, and carry out necessary risk prevention and control in a targeted manner; second, they should strengthen their awareness of risk management and trade standard management, and integrate their overseas Accounts receivable risks can be avoided through insurance and other means; third, we must make good use of policies, especially the 2015 national “One Road, One Belt Policy”, and use overseas investment and in-depth cooperation with buyers to achieve our own transformation and upgrading; fourth, carry out Provide training related to responding to trade frictions, strengthen guidance on companies’ response to lawsuits, and increase assistance to companies in responding to lawsuits.