The theory of international trade liberalization. According to the actual situation today, the comparative advantage of developing countries is labor, so they should produce labor-intensive products (such as clothing) in exchange for capital-intensive products (such as machine tools); in contrast to developed countries, their comparative advantage is Capital and technology, so capital-intensive products (such as cars) should be produced in exchange for labor-intensive products (such as food). Through this division of labor, countries can achieve the optimal allocation of resources, thereby maximizing economic benefits. Of course, because obstacles between countries cannot be completely eliminated (such as the free movement of labor), and national security considerations (such as the need for a certain degree of self-sufficiency in food production), it is impossible to achieve a complete international division of labor, so in reality In an incomplete division of labor. The problem is that this incomplete division of labor should eliminate obstacles to the greatest extent and achieve free trade as much as possible.
Compared with the incomplete division of labor, the more important problem is that countries tend to adopt protectionist measures, including setting import tariffs and import quotas, as well as technical, safe, sanitary and other restrictions. At the same time, many measures have been taken to encourage exports and restrict imports, such as subsidizing export companies, providing low-interest loans to foreign companies buying domestic exports, and dumping. What these measures and policies have in common is to restrict imports and encourage exports, with the result that they distort commodity prices, reduce (or improperly expand) trade volumes, reduce efficiency, and reduce returns. Most protectionist measures restrict imports and encourage exports, which is a reflection of mercantilist thinking and a lack of security. Mercantilism advocates the idea that international trade is over, and importing precious metals is a kind of zero-sum game. They have not seen the side of international division of labor and equal trade that can promote economic growth, that is, they do not know that free trade can increase wealth.
Many people do not understand that the original intention of countries to adopt trade protection measures is to protect their own interests, but the original intention cannot be achieved as a result, often contrary to expectations. First, restricting the import of foreign goods does not necessarily promote domestic exports. Because it is the lack of competitiveness of domestic products that leads to unsound exports and even deficits. Taxing foreign products does not improve the competitiveness of domestic products. Second, the taxation of foreign goods is likely to cause countermeasures by the target countries, that is, retaliation, which will increase the price of domestic exports and reduce the number of exports. Third, the implementation of protection measures is to give domestic enterprises the opportunity to increase exports, but domestic companies do not necessarily act in accordance with the government’s intentions, and it is likely to take advantage of protection measures. On the one hand, it pushes up the price of domestic goods, increases the burden on consumers, and reduces domestic welfare; on the other hand, companies are prone to rely on ideas and even lobby the government, thereby further deteriorating the market environment.
The speed of international trade growth and the degree of opening up can also be observed through trade dependence. According to the historical experience of the economic development of various countries, with the development of the economy, the degree of opening up of a country has gradually expanded, including international trade, international investment, and personnel exchanges. A rough measure of the degree of opening to the outside world is the ratio of total import and export trade to GDP, which is often referred to as trade dependence. You can also use export dependence (the ratio of total exports to GDP) and import dependence (the total of imports and GDP ratio).
The Dilemma of Global Trade Liberalization
Political Economy of International Trade. The issue of international trade has been one of the important fields of economics research since the theory of comparative advantage was proposed by classical economists. After the expansion and development of modern and modern scholars, a very complete theoretical system has been formed. For example, in international trade, countries produce according to their own comparative advantages, and then exchange with other countries, so that all countries can improve their welfare. This has been recognized by academics as a classic, and some people have won the Nobel Prize in Economics. However, these theories have an important foundation, that is, free trade, that is, all international trade theories are developed under the assumption of free trade. However, in reality, there is almost no free trade. Only a few countries and regions are close to free trade, such as Singapore and Hong Kong, where import tariffs are close to zero. In other words, most countries and regions intervene in international trade to some extent, and as long as the intervention inevitably distort commodity prices, thereby undermining the principle of fair trade. For example, the import tariffs reflected in the Sino-U.S. Trade friction are the most typical protectionist means. Compared with other protection means, its features are clear and easy to calculate. For example, if a 25% import tariff is levied, the original US $ 100 product will become US $ 125, and consumers in the importing country will reduce their purchases, and exports from the exporting country will be blocked.
Since free trade is the best and it can maximize the benefits to participating countries, why should countries impose restrictions? This requires an explanation from the perspective of both producers and consumers. Consumers will benefit from free trade, while domestic producers may go bankrupt due to the impact of imported goods. This leads to a paradox: if international division of labor is based on comparative advantage, countries can only produce goods with comparative advantage, and import goods without comparative advantage. However, as a result of this division of labor, two phenomena will occur: one is that according to the principle of increasing costs, countries cannot achieve complete division of labor, so there must be some sectors that do not have comparative advantages; and the other is that even if complete division of labor can be achieved, countries Will become countries that rely heavily on other countries. Because no country can have a comparative advantage in all areas, this is unacceptable to many countries, especially large countries. Since each country needs an industry that does not have a comparative advantage, it can only achieve its existence and development through protection. This is the theoretical basis of protectionism. It also has a reasonable side. It protects domestic producers while protecting consumers. . Because if the division of labor is completely based on comparative advantage, many industries and enterprises will go out of business, and workers will lose their jobs. Without income, workers will not be able to talk about consumption, and imports will not increase.
Having said that, protectionism is prone to flood under various pretexts, which is obviously not good for the world economy or for the domestic economy. Because excessive protectionism not only hurts most consumers, it is also unfair. Many protected sectors and industries may not be really needed because of their strong political power. This point exists to varying degrees in both developing and developed countries, that is, to implement unreasonable policies under the guise of reasonableness, which is also contrary to WTO principles. Extremely speaking, all protectionist policies are based on politics, not economics. The basic logic of political science is the principle of mechanics in physics, and whoever has the power has the final say. Economics is based on the principle of fairness and opposes monopoly. This is the same regardless of the political system of each country. Politicians and governments consider political stability and the support of voters. Therefore, international trade in reality is far away from economics, and more political science is playing a role. Another important aspect of political science is the game, which is particularly prominent in international trade, from GATT to WTO, to bilateral negotiations and changeable negotiations between countries. China’s long-term negotiations to join the WTO, its commitments to join the WTO, and the various trade disputes it encounters afterwards are all a process of gaming.
The world is dividing. The level of economic development of countries in the world today is uneven, and there are many problems. Many problems cannot be solved through trade liberalization. Some problems are internal to the country and some have a long history. For example, in the poorest and most backward regions in the world, sub-Saharan Africa, South Asia, and Central Asia lack basic conditions for economic development and cannot be resolved for a long time. Either there is political chaos, you fight for it, or there is a lack of resources and no economic foundation, or it is damaged by war and the trauma is difficult to repair.
However, it has to be acknowledged that the trend of economic globalization and trade liberalization has brought about further differentiation. Some countries have benefited greatly from this, and some have been left behind to keep up with the times. We can find that the economic development of countries in the world has been very different over the past few decades. Some countries have achieved rapid development and entered the ranks of middle-income countries (such as China). Or follow the traditional development trajectory, or fail to make breakthroughs due to policy errors (such as India); some countries have a poor foundation, and for other reasons, have been underdeveloped for a long time (such as most countries in sub-Saharan Africa ). Although the division of these countries cannot be attributed to trade liberalization, some of the problems are indeed related to them. Generally, developing countries export primary products and import industrial manufactured products. Compared with industrial products, the prices of primary products are lower and they are prone to fluctuations. Without a certain degree of restrictions, it is difficult for developing countries to pass international Trade achieves economic development.
At present, the full recovery of the Russian economy, resulting in a large Russian market capacity. Limited to Russia’s own level of development, its demand for many Chinese products is strong. However, many products in the Russian market is still very unfamiliar, leading to the opening up difficulties, which requires domestic enterprises to really go deep into, rather than just dabble in.
For the economic situation of Russia, the national economy has a solid foundation and huge economic potential. Industry, agriculture and transportation have reached a relatively developed level; Strong industrial base, mainly machinery, steel, non-ferrous metals, petroleum, natural gas, coal, forest industry and chemical industry; Energy, textiles, ammunition and so on are also very developed.
China occupies the first place in Russia’s import market of mechanical and electrical products, base metals and products, textiles and raw materials, miscellaneous furniture and toys, plastic rubber, shoes and umbrellas, and optical clock and clock medical equipment. Germany is China’s biggest competitor in the export of light industrial products, plastic and rubber, optical clock medical equipment to Russia. China accounted for 8.6 percent of Russia’s transportation equipment imports, 7.8 percentage points lower than Japan and 6.6 percentage points lower than Germany.
The Russian market is the best litmus test for Chinese companies looking to launch their own branded products abroad. Do not need to invest too much capital, find the corresponding consumer groups, you can just as in the domestic brand operation, start the operation of overseas brands.
In particular, some enterprises like franchising can also find a huge market in Russia, because for russians, all brands are fresh, they do not have much loyalty to product brands other than luxury goods.
Chinese household appliances are popular. Compared with other countries, the biggest advantage of Chinese household appliances lies in low price and good quality.
Russian market access threshold is not high, the market potential is huge, Russia’s developed financial credit business for the domestic residents to buy credit to provide financial support.
In Russia, for lack of foreign exchange, they prefer barter trade in foreign trade. Since barter trade has many forms, such as resale trade arrangement, compensation trade, clearing account trade, etc. This complicates trade negotiations.
It should be noted that if the russians offer to pay for your goods only if you accept their barter or help them sell certain items to third parties, then you must carefully consider the time, risk and cost involved.
Economic globalization is the increasing interdependence of national economies that has resulted from growing levels of trade between nations. This integration of the world’s economies is possible as a result of technological advancements that allow for quicker communication around the world, as well as drastically reduced costs of shipping goods. Today, it is possible for companies to manage production of goods efficiently, even when production facilities are on opposite ends of the world.
An important result of economic globalization is the increasing level of investment by foreign nationals and corporations in economies, particularly in developing nations. This investment by foreigners has helped drive growth in many developing economies, although there is some concern that economic globalization has in fact increased the gap in wealth between developed and developing nations. Additionally, because developed economies have large sums of wealth available for investment in developing nations, there is concern that foreign direct investment may sometimes create bubble markets in these developing nations. While economic bubbles are not uncommon, their impact can be particularly acute on developing nations.
Surely some people are just starting to understand now, will they ask cross-border e-commerce to do well? You should answer such questions yourself. There is no industry in the world that can do it well. It depends on the individual whether it is good or not. I can only talk about the current market situation.
First domestic e-commerce
1. The domestic seller of Taobao, the development of domestic e-commerce, although the retail channel problem is solved, but on the other hand, the price of domestic goods is also transparent. However, the difficulty lies in the support of funds, and there are considerable risks. At the same time that the price is transparent, the costs of through trains and advertising are getting higher and higher. Sellers have to explore new channels. From this perspective, the price of Chinese goods is not transparent internationally. If you have innovative products or high-quality sources, then you are worth a try. After all, China’s manufacturing industry is still quite developed with low labor costs.
2. Domestic Taobao, including many domestic e-commerce platforms, is in the saturation period. Now you can only buy a store with a poor rating when you want to open a store. It is impossible to open a store. The domestic market is too saturated to develop. If you have to believe that this evil has bought a store with a poor rating, you think you can open it?
No, you still need to go through the through train to advertise and pay the bill. It also says that the ads are flying all over the sky, and the price is rising. Its cost can be imagined, not to mention whether you can sell it, you don’t even know if you are alive or not, how can you sell the goods?
Cross-border e-commerce
1. As for cross-border e-commerce, the cross-border market in 2019 is in the bonus period. Why do you say that? There are more than 400 million active consumers abroad, but there are only 4 million domestic sellers. It can be imagined that the market is in short supply. By this point, everyone should know that many people want to take a share. But it’s not easy to share a cup of ravioli. Want to know more about how to operate and how to better operate the store can follow me.
2. As a traditional foreign trade enterprise, Amazon cross-border e-commerce has erased traditional exporters, importers, foreign wholesalers and retailers, eliminating the cost of intermediate channels. Imagine today that the Internet is popular and online Check it out, the same products, more choices, lower prices, and the existence of such platforms is bound to affect traditional foreign trade. From this perspective, cross-border e-commerce is also the development trend of the future retail industry.
So, what are the advantages of entering Amazon cross-border in 2019?
1. Less sellers, more buyers, less competition
2. Amazon’s highest average unit price for global shopping platform
Comparison of the average customer unit price of global shopping websites. The average customer unit price of AliExpress is US $ 10. The average customer unit price of eBay is US $ 12. The average customer unit price of Wish12 is US $ 17.
3. Logistics advantages
Amazon Dedicated Logistics with more than 100 global operations centers will deliver goods to 185 countries and regions around the world
4. High profit
Amazon Europe customers have a high quality of life, most people shop online, and the profit per unit price is very high
5. Low return rate
99% of domestic e-commerce shipments are in China, and customer requirements are too high, which is prone to return and exchange.
We do Amazon Europe, North America, and five European countries (Germany, Italy, Spain, France, and the United Kingdom). The three North American countries (USA, Canada, Mexico) have relatively high consumption levels and comprehensive quality, and the return rate is extremely low. And profits are guaranteed.
Amazon permanently blacks out buyers with high return rates and supports sellers
6. Low store opening cost
Does not require too many devices, stores can register and log in to the cloud server, one computer can easily manage multiple stores
7. Low labor cost
Amazon does not have an instant messaging tool, and communicates with customers through email, and can reply to customers within 24 hours. Reduce customer service pressure.
8. Store Advantage
There is no limit to the number of items in the store, and no picture space is required
Amazon is the online retailer with the most variety of products in the world. It has a high reputation and reputation abroad. Amazon is geared towards developed countries and has a large buyer flow. The market space is larger. The Amazon platform has fair rules, high levels of sellers, and less vicious competition; Chinese sellers can use the exchange rate difference to earn more profits.
Foreign online shopping customers on the Amazon platform have relatively low price sensitivity and the highest product profits. Amazon has more than 400 million users worldwide, more than 3 million sellers and foreigners ’buying habits are contrary to the regular traffic of domestic e-commerce platforms. It is conceivable that there are still many blank markets on the platform, waiting to be filled. just started.
To prevent the spread of the coronavirus, the Centers for Disease Control and Prevention (CDC) is recommending that everyone wear non-surgical cloth masks while out in public. Experts have recently discovered that some people may be asymptomatic, making it difficult to self-diagnose. All Americans are now expected to take extra precaution. Fortunately, a DIY face mask is fairly easy to make. These cloth masks are intended to protect others from your germs. There are pre-fabricated surgical masks, but sometimes it’s more fun to make your own.
1. Make a Pattern Get a piece of paper and cut out a rough surgical mask shape. Hold it up to your own face and look in the mirror. Is it too big or small? Does it extend too close to your eyes or down below your chin? Keep trimming away paper until you have the shape you want. This is now the pattern for your surgical masks. If you’re planning on making lots of masks, transfer the paper pattern to sturdy cardboard.
2. Choose the Right Fabric Put your pattern over some soft, thick fabric. Draw the pattern onto the fabric as many times as necessary to make the number of masks you need. Leave a little extra to account for any mistakes you might make. After all, you can always trim the fabric a little, but you can’t put any back.
3. Cut the Fabric Cut 1/2-inch strips of the fabric. Fold these in half and sew them around the edges of your masks to make the edge strong and keep them looking even. These also make the seal a little stronger to keep your breath from spreading too much.
4. Add the Elastic Strips Attach elastic strips to the surgical masks so you can loop them around your ears, securing the surgical mask in place. You have many options. You can get small cords of elastic and run them through the top and bottom seams of the masks. You can simply sew the lengths of elastic cable to the masks at the top and bottom of the sides, making ear loops.
Try on the first surgical mask you make to ensure you’re on the right track. Make adjustments to the length of elastic for a tighter or looser fit. This is also an opportunity to see how the mask looks in use. If the elastic pulls the mask too close to your eyes, trim the next mask a little bit to see if you get a better fit.
What is the prospect of AliExpress? Compared to the originator of the world’s cross-border e-commerce, such as Amazon, which has a significant status in the world, AliExpress is a new platform. What is the development direction of AliExpress, and what is the prospect of AliExpress?
For Alibaba AliExpress platform, August 15, 2016 is a day of extraordinary significance. Because from this day, AliExpress has completed the transformation and upgrade from C2C platform to B2C platform. Since then, all sellers operating on the platform have corporate identity. Aliexpress has been changing with changes in the market environment, so what is the development direction of Aliexpress in 2017? What is the prospect of Aliexpress?
AliExpress has completed the transformation and upgrade from the C2C platform to the B2C platform. This action is regarded by many in the industry as the biggest change in the cross-border e-commerce field this year.
“Transforming from C2C to B2C requires more than corporate qualifications. It actually involves various aspects of market mechanisms, rules, models, etc., and requires a combination of punches.” Shen Difan revealed that at present, the AliExpress platform checks sellers every month. To identify the sellers that do not meet the standards; the platform also differentiates all industries and does not allow stores in the form of grocery stores to continue operating; at the same time, the platform is vigorously promoting branded products, allowing consumers to Perception.
This series of measures that seem to be changing from the outside, in fact, still have not deviated from the platform’s consistent branding and professionalization. As the cross-border export e-commerce market is gradually formalizing, only professional sellers can survive the reshuffle period. Shen Difan said: “AliExpress is also a role in the market and has been changing with changes in the market environment. Next year, Aliexpress will change even more than this year.”
B2C transformation in the narrow sense is completed, and the seller structure is changing
Shen Difan: After Aliexpress completed the transformation, the results were good.
First, the buyer experience has improved significantly. This year, the dispute rate of buyers on the quality of goods on the platform has dropped by about 30% to 50%. At the same time, buyers ’NPS (Net Promoter Score) rose by 50%. Second, platform risks are reduced. We used to find some similar infringement risks on the platform. Now, this ratio has been reduced by more than 60%. In addition, the seller structure of the platform has changed. In addition to reviewing corporate qualifications this year, we also checked the seller’s operating indicators, and selected gold and silver sellers based on these indicators. After the platform transformation, the GMV of these sellers has generally increased by 2 to 3 times.
Because the income is more, these high-quality sellers are also willing to go closer to the platform. We found that this year the seller’s willingness to stock is much higher, and even some sellers are willing to go overseas to stock, so the timeliness of logistics has also improved. Moreover, many sellers have begun to work hard on the quality of the products. Some sellers have also developed models for overseas markets, and they have become more focused on product manufacturing.
Except for gold and silver sellers, what feedback do other sellers have on the changes to the platform?
At present, gold and silver sellers account for about 5% of all sellers on the platform. In addition to big brands such as Li Ning and Xiaomi, there are many small and medium sellers on our platform. The transformation does put forward higher requirements for them, and they have also worked very hard.
For the platform, we will definitely direct the traffic to those products and sellers who are willing and able to upgrade the quality with the platform. And we also observe that when these sellers do a good job in service capabilities and product quality, the buyer repurchase rate is also much higher. Therefore, this effect not only depends on the support of the platform, but a large part of the reason is from the sellers themselves. I believe this is a virtuous cycle. With such a benchmark in the platform, other sellers will follow immediately. Consumer choice is the most telling.
After changing from C to B, we see AliExpress has recruited many Tmall sellers in the past year. From domestic e-commerce to cross-border e-commerce, how are these Tmall sellers now living?
Some Tmall sellers have done a good job, for example, Puppy Appliances, First Language, etc., but many sellers have also shown dissatisfaction. From these successful cases, we find that many Tmall sellers have a certain foreign trade background. A long time ago, the export environment for foreign trade was not very good. A large number of people transformed from foreign trade to e-commerce. Another group of people who did well became today’s Tmall sellers. These sellers still retain the skills of doing foreign trade that day, they know how to satisfy overseas consumers.
In fact, when we talk about Chinese goods, the goods in the entire market are divided into domestic and foreign trade. The two products are very different, with different sizes, versions, formats, preferences, and so on. If Tmall sellers want to transfer from domestic production and customer service system to foreign trade in a short time, it will inevitably encounter certain difficulties. However, we also found that these Tmall sellers with foreign trade background are very adaptable. Some sellers even told me that AliExpress took them to the sea today to help them fulfill their dreams of doing foreign trade before. We were very impressed to hear it.
Cross-border e-commerce enters the reshuffle period, there is a huge opportunity for new China manufacturing.
In your observation, what changes have taken place in the overall environment of cross-border export e-commerce this year?
In the past two years, cross-border e-commerce is gradually moving from a state of chaos to a state of governance and formalization. In the past, those amateur sellers who did not understand the products at all, and spent three days fishing and two days drying the nets, have gradually eliminated in the market competition pattern in the past two years. At the same time, those cross-border e-commerce practitioners who were hiding behind the scenes are now more and more willing to be exposed to the public. Some of the outstanding sellers have already listed on the NEEQ. As exposure increases, these sellers are also pursuing formalization and high quality. All signs indicate that the reshuffle in the cross-border e-commerce sector has been very clear.
From the perspective of seller structure, cross-border e-commerce was a marginal market in China’s e-commerce market, accounting for a small proportion. But this year, I think the growth rate of cross-border e-commerce will usher in an unprecedented increase. After the regular sellers enter the market, the infrastructure of the entire market is improving, whether it is logistics, payment, service standards, or product quality. This year, capital’s participation in the cross-border e-commerce market has been much higher, which is enough to prove that this market is entering a period of rapid growth dividends.
Do these changes bring new opportunities or challenges to the platform and sellers?
The market is shuffling, which will be a good time for mainstream players in the market. In addition, due to the entry of capital and large regulated enterprises, the market’s plate will become larger and larger. As the plate grows, I believe more opportunities will emerge.
Before we talked about Made in China, we mentioned Angang Baosteel and other large companies with hundreds of thousands of people, but this is the product of the past industrialization era. Today we will see many companies with dozens or hundreds of people. They already have strong R & D capabilities and market acumen. Small and beautiful companies like this can actually seize new opportunities. We use the words “Made in New China” to describe these companies. When the entire market is formalized, there will be huge opportunities for these companies.
Now AliExpress focuses on branding and specialization
Is the branding proposed in December 2017 still the direction of AliExpress? What is the current progress?
On August 15, 2017, AliExpress completed 100% of the enterprise, but we are still far from real branding. In fact, between enterprise and branding, there is another thing called trademarking, which is also the second step strategy of AliExpress. Trademarking is not the same as branding, but without it, there will be no concept of branding.
AliExpress will put forward trademark requirements for most industries on the platform in the future. It is hoped that sellers can own or operate a brand and have a symbol in the minds of buyers. This symbol represents the tone of the seller, and represents the seller’s product quality and service level.
AliExpress is also launching the “Thousand-Class Brand Program”, hoping to select 1,000 outstanding cross-border e-commerce brands from the platform after the enterprise and trademarkization of the platform is completed. These brands can have a certain understanding in the minds of consumers, and the brand also has a system from production to cross-border supply chain. In the next two years, AliExpress is likely to cultivate such a group of cross-border e-commerce brands. Like Taobao’s “Amoy Brand”, AliExpress will have its own A brand.
Aliexpress has been adjusting the operating categories this year, and the classification has become more detailed. Why did you make such an adjustment?
This is in line with our strategy. We hope to further subdivide some of the business scope so that sellers can focus on one or two categories, really do a good job of products and services, and make this category bigger and stronger. When the seller wants to be big and comprehensive, the professionalism will become weaker accordingly. Today, as the division of labor throughout the supply chain becomes more and more clear, we hope that sellers can be as professional as possible in a certain category.
After the adjustment, what are the original sellers who operate multiple categories at the same time?
Branding and specialization will definitely be the direction of cross-border e-commerce in the future, but we are not saying which group to eliminate, and each group has its value in the industry. Consumers demand better products and better services. These products must be provided by professional sellers. What about better services? It is likely that the service providers are transformed by those sellers who used to make big products in the past. which provided. At present, such a trend can be seen on the platform. Big sellers who previously operated multiple categories have begun to transform into TP and logistics. When the market volume goes up, the regularization becomes more and more obvious, and its role will be subdivided accordingly. Whether at home or abroad, an era of differentiation is bound to come.
What do you think of the future cross-border export e-commerce industry? Among them, what kind of role does AliExpress play?
In my opinion, the concept of cross-border e-commerce does not exist within five years. With the larger business volume and better service experience, I believe that the experience of cross-border e-commerce is the same as that of local e-commerce.
Return to Aliexpress’s role, we still adhere to the mission of “Good Cargo, Happy World”, so that global quality goods can be bought by consumers around the world. In fact, AliExpress is also a role in the market. With the changes in the market environment, we have also been changing in accordance with the market environment. Many sellers and many market practitioners feel that 2016 is the year with the biggest changes in AliExpress. But I want to say a word here, as the market continues to specialize and formalize, AliExpress will change more than this year.
So the development of AliExpress platform is still very impressive. Just look for the industry to enter and do well in store operation. You can also freely travel in such a blue ocean of cross-border e-commerce!
Vietnam has four advantages in attracting investment.
First, the transportation of global trade are convenient. Vietnam has a very good global trade interface. It has many deep-water ports, which creates its geographical advantage in Global trade.
Second, Vietnam government adheres to reform and opening up, and always pays great attention on education.
Third, the labor force is sufficient and cheap. Vietnam’s population structure has an advantage in the development of manufacturing industry. Almost half of the population is under the age of 30, and young people account for more than 50%, which means a huge labor market.
Fourth, tariff preference. Vietnam has formed a value depression in its unique tariff and Global trade policies. Vietnam is one of the countries with the largest number of regional trade agreements in the world.
The disadvantage of Vietnam will cause fatal injury to enterprises.
The biggest defect is that Vietnam’s local supply chain, industrial chain is not perfect, and the personnel efficiency is low. Vietnam’s vocational education system is relatively backward. The dominant products are mainly concentrated in the industries with short industrial chain, low labor force, simple processing and intensive. As a result, most of the local products are relatively low-end products. In addition, due to the underdeveloped local financial industry, it is difficult to finance locally. In addition, the local consumption capacity is not good, and can only rely heavily on exports. In case of Global trade or export policy turbulence, the impact on Vietnamese enterprises will be greater.
It seems that Vietnam is following the development path of China in the past, but China’s economic characteristics are far more than that. China’s market capacity, scientific research strength, product diversification, “full manufacturing” industrial chain, and international influence are all incomparable to Vietnam. This proves that made in China is indispensable. From the perspective of becoming a world factory, it is unlikely that Vietnam will replace China, which will never be realized in at least 3-5 years.
In the context of the “Belt and Road” strategy, Central Asia is the first stop of China in the “Silk Road Economic Belt”, and its important strategic position is self-evident. Carrying out international trade with Central Asian countries will not only benefit infrastructure construction, interconnection and regional economic development in the western region of China (especially Xinjiang), but also bring out the complementary advantages of China and the five Central Asian countries to realize Mutual benefit, win-win trade. This article mainly analyzes the prospects of China-Central Asian trade cooperation from the basic conditions of factor endowment, demand structure, and terms of trade of each country, and finds that the demand structure of Kazakhstan and China is closer, and the space for China-Kazakhstan trade cooperation may be greater. According to the analysis of the terms of trade of various countries, it is known that except for Kazakhstan, the terms of trade of the other five Central Asian countries have deteriorated to varying degrees. They have a strong need to change this dilemma. This is the implementation of the “Belt and Road” strategy and Central Asia. Subjective reflection of objective requirements for common prosperity of regional economies.
1. The “Belt and Road” Strategy and Central Asian Choices In September and October 2013, General Secretary Xi Jinping proposed the strategic ideas of the “Silk Road Economic Belt” and “21st Century Maritime Silk Road” during his visits to Central Asia and ASEAN countries. The “Belt and Road” strategy involves nearly 60 countries including Northeast Asia, Southeast Asia, South Asia, West Asia and North Africa, Central and Eastern Europe, and Central Asia. It is committed to establishing and strengthening partnerships among countries along the route, exploring the potential of regional economic markets, and promoting interregional investment. And consumption, increase employment in various countries, promote people-to-people and cultural exchanges, and achieve mutual aid and harmonious development of trade. With the development of trade globalization, the scale of cooperation between China and Central Asia on trade products and services has continued to expand, and the construction of relevant trade mechanisms and systems has been continuously improved. However, due to the depths of Central Asian countries in the hinterland of Eurasia, the natural environment is relatively harsh The relatively backward economic development level and relatively poor political stability have caused China and the five Central Asian countries to have insufficient depth and breadth in the field of trade cooperation. The “Belt and Road” strategy has followed the common aspirations of the peoples of all countries for the development of the economy and deepened the trade partnership between China and the five Central Asian countries, opening a new path.
There are many areas in Central Asia’s international trade cooperation, and the trade policies of different countries are not the same. The disputes over the distribution of interests among countries in the field of international trade tend to be bullish. Free trade and trade protection policies are difficult to determine. From the perspective of international economics, based on the standpoint of improving the economic welfare of various countries, this article analyzes the benefits of extensive economic and trade cooperation, the advantages and benefits of various countries from the perspective of factors such as factor endowments, demand structures, and terms of trade. The distribution situation and suggestions on China’s trade policy.
2. Status of factor endowment, demand structure and terms of trade between China and the five Central Asian countries
A. Factor endowment and complementary relationship between China and the five Central Asian countries The “Lack of Theorems of Relative Factors” in the Olympian system, namely the Heckscher-Olympian model (HO model), considers that the differences in factor endowment between the two parties in trade are the source of the comparative advantages of countries, and countries with relatively abundant capital export capital-intensive commodities. When importing labor-intensive goods, countries with relatively abundant labor export labor-intensive goods and import capital-intensive goods, so that both parties can benefit from it.
In 2019, the capital-labor factor ratios of China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan were 2981, 3601, 427, 195, and 477 (USD / person). The capital-labor ratio in Kazakhstan was significantly higher than in other countries. China ranks second. According to the HO theory, compared with Ding Kazakhstan, other countries are D-labor-rich countries. They have a comparative advantage in cattle production of labor-intensive products. According to the “relative lack of factors” the Kazakhstan should export capital to other countries. Intensive goods, while importing labor-intensive goods, while other countries should determine the type of products exported and imported to each country according to the rank of their capital-labor ratio. This is the result of theoretical derivation, but it is not entirely true. Kazakhstan’s economy is dominated by oil, natural gas, mining, coal and agriculture and animal husbandry. The processing industry and light industry are relatively backward. Most daily consumer goods rely on imports, and they mainly export mineral products, metals and their products. The situation in China is different. China’s oil and gas resources and mineral resources are scarce, it is difficult to meet domestic demand, and it has a high dependence on foreign countries. In addition, China is facing problems such as overcapacity and excess foreign exchange assets, and urgently needs to stimulate economic growth through foreign investment. This shows that China and Kazakhstan have strong complementarities with the same endowments, and China-Kazakhstan cooperation can give play to the advantages of each country’s elements to achieve mutual benefit and win-win results. Looking at Central Asian countries other than Kazakhstan, their capital-labor endowment ratios are all relatively low. Compared to China, China is a capital-rich country, and Central Asia (except Kazakhstan) is a labor-rich country. China’s export of capital goods and imported labor products will increase the welfare of both parties, and the “Belt and Road” strategy can build a good platform for this.
B. Demand Structure of China and Five Central Asian Countries Lindel believes that the factor endowment theory can only explain the international trade model of primary products, and the types, scope, and flow of trade in T-products between countries are determined by the needs of each country. Lindel’s similarity theory of demand preference mainly includes the following three aspects: First, it is assumed that the products of cattle produced by a country’s enterprises are firstly conditioned to meet the domestic market demand, and secondly, they are considered for export to the international market to meet the international market demand; The second factor is the per capita income level. The third factor is that the more similar the demand structure, the greater the trade in cattle production. In 2019, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan had GNI per capita of 3567, 4738, 603, 477, and 921 U.S. dollars. China and Kazakhstan have similar national per capita income levels. According to Lindel ’s “demand preferences are similar “Theory” indicates that the demand structure of China and Kazakhstan is relatively similar. The more similar the product structure of the two countries is, the easier it is to produce overlapping demand for cattle, which results in a larger trade volume for cattle production. To implement the “Belt and Road” initiative, we must first connect Central Asia. Among the five perimeters of Central Asia, Kazakhstan’s economic situation has great similarities with China, and more trade interests are available to establish and strengthen China-Kazakhstan friendly trade. Relations are an important measure to promote prosperity in Central Asia.
C.Status of Trade Terms between China and Central Asia Terms of trade are usually defined as the ratio of the price of a country’s export goods to the price of its imports, and it represents the ability of a country’s goods to exchange goods with each other. If a country’s exports can be exchanged for more imports, the terms of trade will improve, otherwise it will worsen. It can be seen that the terms of trade essentially reflects how the benefits of trade are distributed among countries. Terms of trade are usually measured by the ratio of a country’s export commodity index to import commodity index within a certain period of time. If the terms of trade is greater than 1, it means that the terms of trade have improved, and Xiaoding 1 means that the terms of trade have deteriorated. In 2019, China, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan had terms of trade of 1.0, 1.9, 0.6, 0.2, 0.7, and 0.5, respectively. Except for China and Kazakhstan, the terms of trade of other countries were different. Degree of deterioration. Among them, Tajikistan ’s terms of trade have deteriorated the most, and it urgently wants to change this situation through the “Belt and Road” strategy. Tajikistan ’s President Rahmon stated that Tajikistan hopes to actively participate in the construction of the Silk Road Economic Belt and make use of the two China’s complementary advantages. Recently, China has comparative advantages in industry, technology, capital and markets, and can conduct two-way foreign investment cooperation with Central Asian countries. Not only can China invest and set up factories in Central Asian countries, but it can also help its products enter the vast Chinese market. China and the five countries in Central Asia have different endowments, different levels of development, and strong complementarity. The construction of the “Belt and Road” will help China and the five Central Asian countries further develop their respective comparative advantages and promote the orderly and free flow of factors in the region. Efficient resource allocation.
Prospects for China-Five Central Asian Trade Cooperation The five Central Asian countries are located in the hinterland of the Eurasian continent. They are extremely rich in minerals, land and species resources, with a total population of 59.29 million, and have huge market consumption potential. The prospects for trade cooperation between China and the five Central Asian countries are quite broad. Comprehensive cooperation can be carried out in many fields such as energy, transportation, science and technology, tourism, investment, and information and communication. Through the “Belt and Road” strategy combined with the western development strategy, China can support and help Central Asian countries make full use of resources and land advantages to develop their economies, improve people’s living standards, and promote the continuous development of good-neighborly and friendly relations, and promote border stability and prosperity . In terms of trade policy, due to the lack of funds, technology and management in Central Asian countries, in order to encourage Chinese enterprises to invest in Central Asia, it is recommended that the Chinese government allocate special funds to support Chinese enterprises to invest and set up factories in Central Asian countries, and establish processing of overseas cattle products. The base grants preferential policies to overseas-invested enterprises in terms of auditing, financial services, and customs clearance. In addition, it is necessary to implement differentiated foreign economic and trade policies according to the different economic conditions of the Central Asian countries. Through the analysis of this article, Kazakhstan is different from other Central Asian countries in terms of economic endowment, terms of trade, etc. It is different from other Central Asian countries. This determines the differences in Central Asian countries ’trade needs. Therefore, we should combine The actual national conditions of the five Central Asian countries take into consideration the adjustment of foreign trade policies to meet the different needs of countries and achieve economic growth and prosperity of each country.
