Whether you are a crab lover or not, you must have heard of the name “Yangcheng Lake Hairy Crabs”. Every year when crab eating season comes, the market is full of “Yangcheng Lake hairy crabs”.
But there are only so many crabs raised in Yangcheng Lake, which is far from meeting the market demand. Then some “smart people” transported crabs from other places to Yangcheng Lake to “bathe” them, and then transformed them into “Yangcheng Lake hairy crabs” in the market. In international trade, this situation is not uncommon.
“Made in Vietnam” or “Made in China”?
Some time ago, the transfer of China’s textile industry to Vietnam has returned to everyone’s attention. Especially in 2022, Vietnam relaxed epidemic control, and a large amount of funds that could not find investment directions poured into Vietnam, a rapidly developing emerging economy. Coupled with the domestic epidemic this spring, , logistics was affected, and textile orders were transferred to Vietnam in large quantities.
However, with the development of Vietnam in the past two years, its rent, labor and other costs have also continued to increase. It no longer has an absolute advantage over China in terms of cost. Its biggest advantage has actually become tariffs. Especially after the United States imposed additional tariffs on China, the contrast in this regard has become even more obvious.
However, Vietnam only has so many educated people, and the area is so large. The development of textile level must also adhere to basic rules. It is impossible to “eat a fat man in one breath”. Some orders cannot be completed, and they can only be done in China.
However, Western countries have long demonized China in their propaganda. As can be seen from the Xinjiang cotton incident, they often create unfounded things to discredit China. Therefore, Western people emotionally prefer Vietnamese products. Vietnam’s tariffs Cheaper too. However, Vietnam’s production capacity is limited. Some things cannot be produced and can only be imported from China. Some things are cheaper to produce in China than in Vietnam.
But there are heavy tariffs on things from China. Just like the so-called “Yangcheng Lake hairy crabs”, some Chinese textiles are labeled “madeinVietnam” when they are shipped to Vietnam. Yes, the customs duties have been bypassed.
“Easier said than done” rules of origin
Of course, if more people do this kind of thing, those policymakers in the West will definitely not be happy. Before the policy was formulated, we bought Chinese products, and after the policy was formulated, we still bought Chinese products. So wasn’t the policy formulated in vain?
Therefore, in order to curb this phenomenon, “rules of origin” were formulated. However, the phenomenon of “policies from above and countermeasures from below” has been commonplace since ancient times, involving hundreds of billions of trade volume every year. The benefits are enough to make people imagine, after all, they are acting against the laws of economics.
The same is true for photovoltaics recently. It is clear that the United States has announced plans to import photovoltaics from Southeast Asian countries such as Vietnam. The result is that A domestic photovoltaic stocks have soared across the board.
However, the Vietnamese government also knows that this is not possible. After all, although it can retain part of the income, its own production level has not been substantially developed, and it will also affect the signing of future preferential tariff treaties. Because of this, the Vietnamese government has been strengthening measures in recent years to severely crack down on origin fraud and illegal re-export trade operations. As of 2022 In the first quarter of this year, the Ministry of Industry and Trade of Vietnam has cooperated with relevant ministries, associations and enterprises to handle more than 200 investigation cases initiated by foreign countries and targeting Vietnamese export commodities.
However, if you want to curb this kind of behavior, you are going against vested interests. It requires the government’s strong determination and governance ability. The final result in Vietnam is still difficult to know.
Russian oil? No, it’s Indian oil
What is even more surprising is the current oil price. The price of crude oil has been rising recently and has now exceeded 120 US dollars. Large American investment institutions even predict that international oil prices will rise in the third quarter of this year. to150USD/ barrels.
The rising oil prices have driven up the prices of products such as PX, PTA, and polyester yarn, causing textile companies to suffer. The Russia-Ukraine war caused European countries to impose restrictions on Russian energy exports, resulting in tight crude oil supply, which is an important reason for the surge in crude oil.
But as European countries import less Russian oil, will there be no place to sell Russian oil? Of course not. According to statistics, after the Russia-Ukraine war began, India imported nine times more crude oil than before. No matter how you think about it, India’s crude oil consumption cannot increase that much all at once. So many chemical plants and cars in Europe need oil, and they always have to find places to replenish it, so they started importing it from India.
The price of Russian exports to India is said to be only 70 US dollars, and then the Indian oil changed hands and became the current price of 120 US dollars. Later, Europe also introduced restrictions, stating that at least 50% of the exported oil must be produced locally, and then India would blend the oil bought from Russia. Then exporting it complies with relevant regulations, and this has become an open secret.
In the end, Europe sanctioned Russia, Russia sold oil, and India made money. It can be said to be a “win-win-win”.
Due to various reasons, China and some countries are often suppressed in international trade. However, no matter how suppressed they are, they cannot completely violate economic laws, otherwise some weird things will easily happen.
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