The current situation in our foreign trade development is more complex than in 2014. In the first 10 months of 2015, our exports were $186 trillion, a decrease of 2.5 per cent. From export products, the growth of electric products was sustained, with exports growing by 0.8 per cent on the same scale, with a 13.9 per cent increase in light exports, which was significantly higher than the overall level of the country. It is recalled that over the past five years, Chinese exports of lighting and appliances have continued to grow at a high rate, becoming a small number of industries that sustain growth in relative to the weakening of the overall economic environment, both domestic and foreign, and in particular the downward pressure on the external trade situation. While exports continue to grow, the continuing decline in export growth also reflects the multilateral complexity of the current lighting industry for external trade, which requires careful analysis of the future external trade situation of the industry.
Market demand for foreign trade development remains strong
The demand for international markets is the first element of industrial development, especially foreign trade growth. Export growth in the lighting and appliances sector has continued over the last five years, maintaining an increase of more than 15 per cent, with a peak of nearly 35 per cent in 2012, resulting in rapid growth mainly from the enormous demand on international markets for semiconductor lighting products. With the gradual acceptance of LED lighting products by consumers, international market demand for such products has expanded, while the traditional PV market has been shrinking, and the export of PV products has continued to decline. In the first three quarters of 2015, exports of PV products were cut by 12.5 per cent as compared, while exports of PV products were nearly 14 per cent below the decline, and exports were reduced by more than 15 per cent. The sustained growth in the lighting and appliances sector is largely dependent on the growth in foreign trade in LED lighting products. In the near future, the market for LED lighting products is still on the rise and demand for LED lighting products from domestic and foreign markets will remain a growing trend; In the long run, however, it should also be noted that the distinctive characteristics of LED lighting products, as well as the apparent trend of the integration of sources and lights, will be lower than traditional products, the market share for replacement of light-source products will change, that production enterprises should be adequately prepared, and that adjustments in production capacity and product structure should be adequately prepared.
Competitiveness and comparative advantage remain evident
Our lighting industry has been able to maintain a steady and rapid development posture over the last 20 years, primarily as a result of the loose industrial environment and significantly lower labour cost advantages in industrial developed countries since reform development. With changes in social development and the increasing demand for environmental protection from the State, the tightening of land policies, etc., the rising cost of labour and the increased environmental governance requirements of enterprises have led to the gradual disappearance of the previous cost advantages of our industries. LED illumination products are clearly manufactured in electronic form, and the country’s lighting industry is also undergoing a transition from labour-intensive to automated production. Enterprises in the lighting industry should constantly increase their inputs in the areas of product development, design, intellectual property protection and application, branding, cross-border cooperation, smart manufacturing, etc., and develop new competitiveness as soon as possible, shifting from low factor cost competition to branding, networks, services, etc., and continuing to maintain the international competitive advantage of the enterprise and of our lighting industry.
Whether trends in international industrial transfers are visible
Process trade is heavily dominated by foreign enterprises, with general trade dominated by domestic national enterprises. With the gradual erosion of advantages such as low labour costs, the ratio of processing to general trade has evolved. Processed trade accounted for more than 50 per cent of total trade during the peak period of economic development over the last 20 years, down to around 30 per cent in the last two years. At present, global industrial development is taking on several new features, on the one hand, the reindustrialization process in developed countries and the return of high-end industries to their countries; On the other hand, many labour-intensive industries are being transferred to countries such as South-East Asia, with less investment from outsiders in China, and China’s figures for domestic and external investment are gradually flat. With the impact of the international project to promote the use of efficient lighting products globally, many developing countries, particularly in South-East Asia, are actively building up their lighting industries, using low human costs and the development basis of the former electronic industry, as the LED lighting technology advances and develops. India, for example, is actively working with countries with strong lighting industries, such as Japan, to introduce production techniques and business management to improve product quality while speeding up the establishment of its LED Lighting Product Standard System and is rapidly developing its LED Lighting Industries. While the country’s lighting industry currently retains its advantage in international markets, the trend of international transfers of the industry has been initially shown, and the relevant production enterprises should pay active attention to changes in foreign trade markets, adjusting product orientation and market layouts.
Government support and policy environment
From the country’s macro-regulation perspective, foreign trade has entered a new dynamic from high to medium speed. The new Government has introduced intensive policies to stimulate the foreign trade situation, followed by 13 foreign trade promotion policies. As indicated in the national communication No. [2013]83, trade facilitation measures have been put in place; the national communication No. [2014]19 sets out adjustment mechanisms to promote export rebates; the national communication No. [2014]49 provides incentives for the import of advanced technical equipment and spare parts; the national communication [ 2015]9 provides advice on accelerating the development of competitive advantages for foreign trade; and the national launch No. [ 2015]55 provides advice on improving the external trade environment, clearing the import and export chain charges, etc., as well as comments and suggestions on the development of new business models, such as cross-border electricians, have sought a positive policy environment for our foreign trade. Specifically in the lighting appliances industry, as global demand for efficient lighting products continues, while new and efficient lighting products and technologies, represented by LED lighting, are on the rise in recent years, the lighting industry has received a series of preferential policies in various areas, such as scientific and technological development, industrial promotion, foreign trade promotion, etc., and lighting enterprises have a more liberal policy environment in terms of product rebates, technological upgrading, scientific and technological innovation. In 2015, the Chinese Lighting Association, in collaboration with the Ministry of Commerce, completed a focused industrial competitiveness study, with the lighting industry as a top priority for the Ministry of Commerce.