What opportunities and challenges does Fujian FTZ bring to local enterprises, especially traditional production-oriented exporters?

Opportunities

A

The establishment of the Fujian FTZ has provided local exporters with institutional safeguards. The FTZ makes comprehensive and systematic arrangements for the development of economy and trade between each other. These include the provision of liberal market access conditions

Development of suitable trade remedies and dispute settlement mechanisms.

B

The transformation of the development mode of local export enterprises, especially the traditional production-oriented enterprises, needs to be realized in the economic development strategy of the FTZ.

C

The key for local exporters to win in the new round of globalization is to build local value chains.

2

Challenges

A

Low value-added

Labor-intensive products still account for a certain portion of the exports of local enterprises, especially production-oriented enterprises, and low prices are the main advantage of these products to compete in the international market, so it is difficult to make up for the rising costs by raising prices in a buyer's market. The profit margins of small and medium-sized enterprises have been squeezed to varying degrees, hitting the production enthusiasm of enterprises.

B

Compared with the large enterprises, the local export enterprises' access to financing is still very high, due to the small and medium-sized enterprises are generally small in scale, unstable business conditions

, imperfect financial system, limited creditworthiness, commercial banks rarely give them loans, and, China's banks to implement the life-long responsibility system for loans, the personnel required to be responsible for bad debts, prompting them to be more willing to lend money to large enterprises. willing to lend money to large enterprises. Even if a medium-sized enterprise receives a bank loan, its lending rate will be 20

-50

higher than that of a large enterprise, and the cost of financing is higher than that of a large enterprise. Single form of financing, the international emerging factoring

Warehouse receipt financing, etc. are seldom opened by banks.

C

Local export enterprises are mainly engaged in traditional labor-intensive industries, mainly engaged in processing trade

Relying on the well-known brands and sales channels of multinational corporations to maintain their survival, with a single export product. (Transferred from the official website of Fujian FTZ)