“Made in China” ends the EU’s Generalized System of Preferences and export orders face challenges

Tuoshen Electronic Technology Co., Ltd. in Dongguan City, Guangdong Province originally exported small digital equipment to Europe. Under the situation that the price advantage of export products has been relatively weakened, the company has lost nearly 70% of its traditional orders in recent years. General Manager Tan Zhenghui said that artificial intelligence Cost pressures such as tariffs and tariffs are increasing year by year, and the company is transforming and developing through the development of new products and new markets.
Rising costs have obviously become one of the “new normals” of China’s foreign trade. Reporters recently learned from the Shenzhen Inspection and Quarantine Bureau that according to a Generalized System of Preferences regulation announced by the European Commission, China will be excluded from the list of beneficiary countries from January 1, 2015. At that time, China’s exports to the EU will be subject to tariffs may increase significantly.
The Generalized System of Preferences is a universal, non-discriminatory and non-reciprocal tariff system that industrially developed countries impose on manufactured and semi-manufactured products exported from developing countries or regions. When the products of the beneficiary country show strong competition in the international market, In case of failure, the discount qualification will be cancelled. It is reported that the average tariff reduction range for China’s GSP certificate of origin and regional preferential certificate of origin is around 6%.
At present, about 40 countries grant China GSP treatment, of which the EU countries are the main members. Taking Shenzhen as an example, in the first November of 2014, the Shenzhen Inspection and Quarantine Bureau issued about 200,000 GSP certificates of origin for products exported to the EU, accounting for 60.6% of the total GSP certificates of origin issued by the bureau. amounted to US$6.1 billion, and the company received approximately US$300 million in tariff reductions.
It is worth mentioning that while canceling the Generalized System of Preferences for Chinese exports, the EU continues to implement GSP treatment for some products from Southeast Asian countries such as Vietnam, as well as Peru, Argentina and other South American countries. For example, from January 1, 2014, A variety of Vietnamese products, including shoes and hats, have been granted this kind of general tariff preference by the EU.
In Tan Zhenghui’s view, the European Union, Japan and other countries and regions have continued to reduce their GSP products to China in recent years, which has made matters worse for foreign trade companies in a severe situation. “This means that EU merchants may pass on the increased tariffs to us, and the company’s already low profit margins will be further squeezed. Once the product price increases, merchants will purchase from countries that can enter the EU market with zero tariffs.”
Tuoshen Electronics is not the only one under pressure to transform. Fan Youbin, general manager of Foshan Aisda Clothing Co., Ltd., also said that export costs are increasing, and there is a serious rush for orders in Southeast Asia. Europe was originally one of Aisda’s main export markets, but now the proportion has dropped to less than 10%, and the company is transforming its layout for domestic sales. market and shift to producing higher value-added products.
Some companies use differentiated GSP policies to transfer industries and investments. Public reports show that Ningbo Shenzhou Knitting Co., Ltd., a leading domestic textile and apparel enterprise, has moved its production base to Southeast Asia. The scale of Shenzhou’s Cambodian branch has now reached more than 8,000 people; domestic textile industry giant Blum Oriental Company has also opened a branch in Vietnam , with a total investment of US$250 million.
Huang Fa’an, general manager of Guangdong Bifan Garment Co., Ltd., is more optimistic. He believes that orders “flying southeast” are concentrated on low-end products, but countries such as Vietnam do not yet have the ability to produce mid-to-high-end products, and the shipping speed and product quality cannot keep up. With “Made in China”, companies can adjust their product structure toward the mid- to high-end direction and expand profit margins.
At present, China still has certain advantages in the comprehensive quality of its labor force, industrial clusters and supporting capabilities. Deng Yujun, a professor at the School of Economics and Management at South China Normal University, said that low-end export manufacturing is facing increasing pressure to survive in China. This is an inevitable trend of industrial gradient transfer. China’s attraction of foreign investment is changing from a “low-cost” advantage to a complete industrial chain, The comprehensive advantages of talent gathering, huge market and other factors.