The Impact of The Sino-US Trade War on the Development of the Industry -Analysis of Huang Shaoxuan, Deputy General Manager of the New Material Home Camp Service Center.

Since Trump took office, the trade dispute between China and the U.S. has intensified, which is bound to have an impact on the industry and the overall market environment, and we need to look at it from a more comprehensive and objective perspective.
01
Semenic
First, long-term
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is a strategic level involving the overall and future development of the situation, rather than a local, short-term tactical level of confrontation.
second is complexity

for the world's two largest economies, both sides have a wealth of specific means to deal with, there is more room for

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is a compromise
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stage competition will become the norm, the result is not win or lose, but constant compromise, until the two sides "fully integrated." We must look at the trade war between China and the United States from a development perspective, not from a confrontational point of view, from a change perspective, not a static point of view, from a strategic rather than a tactical point of view, and from a global, not a regional, perspective.
the key cause of the Sino-US dispute is that both countries have big structural problems, and it is not who can defeat each other who ultimately decides the outcome of the dispute, but who can solve their own internal problems.
who can speed up reform, activate the market, continue to develop, solve their own problems, who is the real winner. Purely from the point of view of solving the problem, the U.S. problem is actually more difficult to solve than China's, and we see that the current unilateralist policy of the U.S. in politics, military and economy is not just aimed at China, but at all the big countries, which shows that the problem facing the U.S. is bigger and heavier.
influenced by the traditional concept of binary, the current argument about win or lose is more, in fact, from the development point of view, more is a draw, is a compromise, is a compromise in the integration. There is no absolute win or loss, there will be no absolute win or lose. We must clearly see that China is integrated into the world and therefore has the ability not to let itself lose, and that the purpose of the United States is actually to solve its own development problems, not simply a winning word can be summed up.
02 Impact
1, macro-national level
First, in the face of the trade war provoked by the U.S. government, relevant ministries and local governments have already made it clear that they will study and take four measures to mitigate the impact of china-U.S. trade frictions, including: continuous assessment of the impact of various types of enterprises;
is that China's economy has entered a new normal situation, this year's two consecutive targeted devaluations also show that appropriate monetary easing has become a reality. Global watering down the dollar tightening policy, China's moderately loose monetary policy widens the gap with the U.S. dollar exchange rate, through foreign exchange control to maintain the basic stability of the RMB exchange rate is only a short-term action.
third is a global market, although all countries think that the United States is the number one power, but also do not want a single large United States, and we do not want neither side of the United States to go wrong. China is the largest single market, the United States is the most powerful country, who has a problem, the world can not stand. This trade dispute between the two countries must be resolved through negotiation and compromise, and finally reach a dynamic balance and checks and balances. Countries' choices are mainly based on their own internal factors, we are all adults, although the united States will be affected by external causes, but the United States external factors are secondary after all.
Fourth, China's economy will be affected in the short term, but in the long run, it is good, because the trade war will certainly promote further reform of China's economy, will force the government to more support the development of private enterprises, more liberal market regulation and the introduction of more relaxed support policies;
2, the mid-view industry level
First, from the point of view of market capacity, the United States exports less, will naturally promote the industry's exports to other regions. As a result, the market will be further dispersed, but the impact of overall demand capacity will be modest.
second, from the point of view of industry competition, the trade war will intensify the industry (industry and downstream industry) competition, especially in the domestic market, which has already entered the stock market stage.
third is to further promote the global adjustment and change of industrial layout, in particular, to promote Chinese mainland enterprises to move out of Southeast Asia, and have to accelerate the implementation of globalization development strategy.
Fourth, from the point of view of product technology, trade war may have some influence and restriction on the development and progress of industry technology, at least in terms of ideology, it will inevitably lead to some negativity in research and application. But we also need to recognize that the United States is highly market-oriented, and that American businesses and the U.S. government are two different things. On the other hand, we should also see that the trade war will certainly greatly encourage local enterprises to increase research and development and investment in independent technology, and further enhance and improve the supporting capacity of the industry.
3, micro-enterprise level
On the one hand, for the industry enterprises to increase tariffs, nothing but the following aspects can be addressed:
1) there is sufficient gross margin space for their own digestion, while further reducing costs to improve efficiency.
2) gradually reduce the share of exports to the United States, while developing other regional export or domestic markets.
3) set up factories in backward areas outside China, such as Southeast Asia, to achieve off-the-go exports, reasonable avoidance of tariffs. Or through industry organizations, unified fund-raising in Southeast Asia to establish a unified distribution and assembly plant, to maximize the avoidance of a separate plant of huge investment and risk, maximize the reduction of operating costs.
4) through trade associations or local government support, exports of U.S. products to receive special subsidies for trade wars, and during this period of development transition to obtain relatively loose policy support.
, on the other hand, what can be done for upstream suppliers?
1) relying on overseas factories, maximize the downstream enterprises to build factories overseas to provide plant construction and cooperation facilities.
2) Relying on the accumulation of the domestic market, to provide the necessary support for the transformation and expansion of domestic sales enterprises, such as tailor-made development products, domestic enterprises exchange and inspection services support.
3) For large-scale standardized enterprises, in order to further reduce manufacturing costs, to give the necessary cooperation support, such as for export categories to give a certain price subsidy, special research and development more cost-effective products and special design more efficient solutions.
4) fully cooperate with downstream enterprises to obtain government-specific subsidies and related policy support, fully undertake the relevant services within their power.
in short,
Chinese businessmen are shrewd and cautious in their response.
such as factory relocations, in the short to medium term most companies are unlikely to uproot domestic factories and move production overseas. Southeast Asia will gradually become a branch of China's main factory simple processing or assembly packaging workshop, to obtain local certificate of origin, the same export to the United States. Therefore, in order to adapt to the new situation, china's possible manufacturing structure is decentralized manufacturing, the core manufacturing technology will remain at home, domestic factories can therefore be streamlined and upgraded, in Southeast Asian countries to do final assembly or simple processing and manufacturing and packaging, and export.
So
the United States engaged in tariffs and anti-dumping, in fact, only to encourage Chinese enterprises in the operation of increased "trouble and costs", not only in the short term can not play a key role, in the medium to long term is good for Chinese enterprises
- will further enhance the ability of enterprises to operate, and greatly promote the globalization of enterprises development strategy. We will see that these increased costs will gradually be paid for by Americans. The trade war between China and the United States has not been a year or two, and experience over the past two decades has confirmed that after the U.S. tariff and anti-dumping policies against China, companies and industries have not returned to the U.S. mainland, but have moved to the mainland, or imported from abroad, and wherever they are, behind or behind Chinese.
of course,
in addition to decentralized manufacturing, the market side should also consider decentralization, not too focused on the single market single product.
market is scattered, of course, from production, management to marketing are more tired, but this will not be stuck at any time. We must note that today Americans' tariffs on Chinese products will increase by 10% and may increase to 25% tomorrow. More than 20 years ago due to the Taiwan crisis caused by the trade war, more than a decade ago on the solid wood bedroom anti-dumping, today's cabinets, bathroom cabinets, mattresses anti-dumping, tomorrow may also be on the sofa, table and chairs and other anti-dumping.
no matter how hard and tired, our enterprises must consider the implementation of "back-end decentralized production, front-end decentralized market" of the global business development model, which is also an inevitable trend.
03
the continuous deepening and development of the Sino-US trade war will further promote our future-oriented enlightenment on the premise of reflecting on the past.
First, the market is the invisible hand, change more and more rapidly, more and more difficult to predict, but still have to make predictions, relying not on methods and tools, but macro-philosophy and micro-intuition, is a comprehensive rational and emotional judgment.
for capable enterprises, it is true that a range of research functions should be established to form a basic set of preventive or operational response mechanisms. We should not only anticipate the challenges, foresee the macro situation and industry trends, but also make such anticipations concrete at the micro level.
is very important development strategy, whether at the national, industry or enterprise level, without strategic traction, development can not be sustained, will inevitably be passive blind, unable to focus and cause huge waste.
Trade War reminds us that while increasing our domestic occupancy rate, we must accelerate the process of transnationalization - from passively confined to the domestic, to the active implementation of overseas and globalization strategies, pay more attention to independent technology research and development, more in-depth participation in the global division of labor and collaboration, build a global platform for production and marketing research, the implementation of "back-end decentralized production, front-end decentralized market" global business development model.
is to have a bigger dream, enough determination, perseverance and insight.
to be good at seizing development opportunities, because the most difficult time in the market, but also the most reflective of the ability, the greatest opportunity, this period of cognitive and behavioral choices is critical.
is the question of how to further expand and open up forever, how to keep pace with the times, and how to further emancipate our minds and seek truth from facts.
the political and economic status quo, we have a lot of room and potential to improve.
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