How Should China'S Export Enterprises Respond To The "Stingy" Policy In Britain?

The British government launched the so-called "most stingy" emergency budget on the 22 day. It not only cuts public spending sharply, but also raises the domestic consumption tax, and plans to impose a bank tax in order to reduce the huge government budget deficit to zero within 5 years.

Among them, the consumption tax will increase from 17.5% to 20% in January 4th next year. It is estimated that this tax increase will exceed 13 billion pounds a year.

As China's third largest trading partner in the EU market, will Britons cling to pocket consumption will have an impact on China's exports to Britain?

How does it affect the overall trade between China and Europe?

In response, foreign media quoted analysts as saying that the impact of the increase of consumption tax on circulation will appear in the UK, and the blow to retailers will be more important than the end users.

Specifically, consumers will be greatly affected by price flexibility (fast moving consumer goods), and consumers will have to digest their own costs for high priced consumer goods, or they will shift the loss to downstream suppliers, including Chinese suppliers.

In an interview with our reporter, Ms. Yao Ling, the European Research Department of the Ministry of Commerce and international trade and economic cooperation research, answered very cautiously: "the Institute is conducting an assessment."

But she also believes that the increase in consumption tax in Britain and other EU countries will not seriously affect the trade between China and Europe.

At present, the proportion of electromechanical products and high-tech products to China's exports to the UK is as high as 40%~50% (similar to the export proportion of the EU market), and domestic related industries should be paid attention to.

Daily textile (such as clothing, shoes and caps, etc.) is my main export product to the UK (EU).

Reporters noted that in the UK's consumption tax increase products, daily necessities such as food and children's clothing were excluded, which means that only part of the domestic textile export products will be affected.

Referring to the whole trade between China and Europe, Yao Ling believes that half of the EU countries, including China's main trading partners, have implemented fiscal tightening policies in Germany, France, Britain and Italy. This policy will have an impact on restraining consumption demand, especially the devaluation of the euro will have a greater impact on China's exports.

But fortunately, Britain is not in the euro zone, and this exchange rate pressure is slightly lighter.

But how big the impact is, we must make specific analysis of different products.

At the same time, she pointed out that although the feedback from the Canton Fair this spring showed that the volume of imports signed by EU importers was reduced, and most of them were "short lists and small bills", but the increase in bilateral trade volume in January ~5 was 20% higher than that in the same period last year. China's trade with the EU has achieved a steady recovery this year, but it is not easy to exceed the 2008 level.