Trade war escalation Wood industry should avoid low-end competition

A few days ago, China National Forest Products Industry Association will organize enterprises to actively participate in the "301 investigation" of the international rights protection of forest-related products and the response to the international trade barriers of forest products.

 

 

"In view of China's global production and trade of forest products, Sino-US trade wars, '301 investigations' will impact China's international trade in forest products and spread to a greater extent." At the recently held 2018 World Flooring Industry and Commerce Summit, China Shi Feng, secretary-general of the Forest Products Industry Association, said that the US plywood and flooring industry requires the US government to include softwood plywood in the $50 billion product list to impose a 25% import tariff. The China National Forest Products Industry Association and related member companies After urgent communication and consultation, we immediately submitted our defense comments to the US government.

 

 

According to the data of the State Forestry Administration, the total value of the national forestry industry exceeded 7 trillion yuan for the first time in 2017, and the import and export trade volume of forest products reached 150 billion US dollars. The average annual growth rate of the total output value of the forestry industry in the past five years reached 12.1%. Product production, trade status as the largest country.

 

 

"This has caused concern and abnormal trade interventions in major trading countries." According to Shi Feng, in addition to the "332" and "337" surveys that have already been encountered, wooden composite flooring and plywood "double-reverse" investigations, floor lock patent investigations In addition, this year, the worst and most involved is the US "301 investigation" taxation and related matters related to forest products.

 

 

Avoid conflicts in the trade war

 

 

"The trade war is most afraid of self-confidence, copying their own back road." Ding Minghao, special assistant to the general manager of the living floor, said that since the Sino-US trade war, some flooring companies have planned to go to countries with low labor costs such as Vietnam and Cambodia. Building a factory, from the perspective of the survival and development of a single enterprise, this approach is understandable. But from the perspective of the entire Chinese flooring industry, it may not be a good choice. This is because, on the one hand, this approach does not expand the demand for the flooring market, just to change the order of a lower cost to grab the orders of domestic enterprises, which is equivalent to playing yourself. On the other hand, this approach is only to maintain low-cost competitiveness, and the continuation of low-end competition is not conducive to the transformation and upgrading of flooring companies.

 

 

In Ding Minghao's view, China is the world's largest producer and exporter of flooring. There is no possibility to build a new factory in a short period of time and completely replace China's production capacity.

 

 

Ding Minghao believes that the positive approach to dealing with trade wars is to improve the brand competitiveness and standard competitiveness of Chinese companies. At present, the living home floor has established three global R&D centers in Milan, Italy, etc. In addition to the research and development of fashion trends and products, it has also participated in the formulation of many national and international standards for the flooring industry, which is the national standard for antique wood flooring. The only person responsible for drafting the unit. To improve the influence and voice of Chinese flooring companies in the world market, they must occupy the commanding heights of standard construction and have the dominant position in the standard field.

 

 

Looking for opportunities in trade wars

 

 

"The trade war is more than just a 'war.'" Lin Haidi, general manager of Jiangsu Bell Decoration Materials Co., Ltd. said that with the escalation of the trade war, the floor companies were forced to think strategically about what the top-level design of the enterprise is. Customer, sales, market share, or profit. Only by thinking clearly can you know what to do next.

 

 

Lin Haidi believes that the positive approach to dealing with trade wars is not simply to move factories to Southeast Asia or other countries to solve the manufacturing problems of products. This is because Chinese companies need to adapt to local culture, laws and regulations, and national policies when investing in any place. It is undeniable that in the long run, going out and introducing is a development trend. With the changes in the business environment and trade policies, more and more companies are beginning to choose multi-regional and even multinational production, allowing customers to trust the strength of the company and reduce the risk of excessive production capacity.

 

 

In Lin Haidi's view, with a view to long-term development, companies need to pay more attention to front-end sales, that is, set up sales offices in the market where customers are located, and move closer to consumers, reducing the number of factories and consumers. Many links.

 

 

Although the United States is a very important market, the trade war has forced companies to accelerate the development of other markets and promote their competitiveness through overseas markets.

 

 

Segmentation of international markets

 

 

"In view of the current situation in the international market, flooring companies should enhance their product design innovation capabilities and focus on the extension of the vertical industry chain." Lu Qingxun, general manager of Jilin Dunhua Sentai Wood Industry Co., Ltd. said that at present, export-oriented flooring companies pay too much attention to output value and output. And the increase in sales revenue, but did not achieve the purpose of controlling and possessing a certain category or in a certain market. On the contrary, neglecting product upgrades and weakening technological innovations due to excessive market share, often leads to oversupply of low-end and low-output products.

 

 

"At this stage, many international brands are squeezing the sales channels of various types of Chinese export enterprises." Lu Qingxun believes that in the face of trade war escalation, segmentation of the international market will be an effective way for corporate branding strategies.

 

 

Lu Qingxun reminded that it is still necessary to maintain traditional cooperation in the segmentation of international market channels. In addition, from a certain category and a certain market (currently, the low-end market has been severely saturated, but the medium and high-end markets still have great potential for development) as an entry point to cultivate products endorsed by end consumers and gradually get rid of foreign brand control. International market channels. He believes that regardless of whether there is a trade war, reducing the volume, upgrading the product design level, focusing on the extension of the vertical industry chain is an effective way to deal with the challenge of "risk" as "machine." (Reporter Zhou Chunyu)

 

 

Transfer from: China Trade News