The Impact of Technical Trade Measures on China's Machinery Industry

Abstract In recent years, the industrial scale of China's machinery industry has continued to expand, and its proportion in the national economy is on the rise. At the same time, the trade barriers encountered by China's machinery products overseas have also increased. Among them, technical trade measures are considered to be Chinese enterprises after the RMB exchange rate reform...

In recent years, the industrial scale of China's machinery industry has continued to expand, and its proportion in the national economy is on the rise. At the same time, the trade barriers encountered by China's machinery products overseas have also increased. Among them, the technical trade measures are considered to be the main obstacles encountered by Chinese enterprises in the export after the RMB exchange rate reform, which has attracted the attention of domestic export enterprises. According to statistics, since 1995, two thirds of the members of the World Trade Organization (WTO) have notified (ie, new regulations and new rules affecting trade) that they are technical trade measures. In 2010, 31.74% of China's export enterprises were affected by foreign technical trade measures to varying degrees; direct loss of export trade was 58.241 billion US dollars, accounting for 3.69% of the export value; the new cost of enterprises was 24.391 billion US dollars. Among them, the electromechanical industry is most affected by technical trade measures, accounting for 29.67% of the total direct losses.

I. Analysis of the technical trade measures of the global machinery industry

1. The number of TBT notifications involving mechanical products is relatively reduced, and the notified countries are concentrated.

According to the data released by the WTO, from 2002 to September 2011, the world concerned the mechanical products notified to the WTO in accordance with Article 10.6 of the Technical Trade Measures Agreement (hereinafter referred to as TBT) (in this article, the customs code is in Chapters 84-89). A total of 1,218 TBT notifications for the statistical basis, accounting for 12.5% ​​of the total global TBT notifications during the same period. From 2002 to 2009, global TBT notifications involving mechanical products showed an upward trend, from 49 in 2002 to 223 in 2009. After 2009, global TBT notifications involving mechanical products began to plummet and fell to 2010. 140 items, a decrease of 37.2% compared with 2009.

A total of 1,218 TBT notifications involving mechanical products were filed by 48 WTO members. Among them, China, Israel, the United States, Thailand, Brazil, Japan, South Africa, Kenya, Taiwan, and Ecuador are among the top ten. The TBT notifications of mechanical products by the above 10 members accounted for 86.0% of the total number of TBT notifications for global mechanical products.

2. Developed members are still the leader of TBT notification of mechanical products

Among the 48 members involved in TBT notification of mechanical products, 12 were developed members, and 506 were notified, with an average of 42 members per member. There were 36 members in development, and a total of 712 were notified, with an average of about 20 members per member. Although the total number of TBT notifications among developing members is higher than that of developed members, the frequency of TBT notifications for individual developed members is twice that of developing members. Judging from the notification measures, most of the TBT measures were first proposed by developed members such as Japan, the European Union, and the United States. The developing members followed suit, and because of the different technical levels of the two sides, the technical standards of developed countries were often stricter than the developing members; Among them, the developing members are more passive, and they propose to extend the transition period and give more technical assistance.

3. Safety and environmental protection have become hot spots for TBT notification of mechanical products

From 2002 to September 2011, in the 1218 TBT notifications for mechanical products, the safety-related notifications ranked first, with 691 items, accounting for 56.7%; followed by environmental protection, 394 items, accounting for 32.3%. . Among the 691 notifications related to security, Israel (174), China (147) and the United States (83) were among the top three, and the number of notifications from the above three members accounted for 58.5% of the total number of notifications.

2. Analysis of the characteristics of China's machinery industry affected by technical trade measures

1. The machinery industry is most affected by technical trade measures

With the rapid development of the machinery industry, the technical trade measures encountered in the export of mechanical products in China are increasing. According to the statistics of the General Administration of Quality Supervision, Inspection and Quarantine, since 2006, China's electromechanical instruments have always ranked first in the industry affected by foreign technical trade measures. Among them, in 2010, electromechanical instruments accounted for 29.67% of the total direct losses affected by technical trade measures in China in that year; in 2009, the ratio was 38.81%; in 2006, it was 24.20%.

At present, the technical trade measures affecting the export of Chinese machinery products notified by major trading partners such as the EU, Japan and the United States focus on technical standards, certification, safety and environmental protection. For example, as a key equipment for photovoltaic power generation systems, PV inverter products have mandatory certification requirements in major markets around the world, including ETL certification in North America and CE certification in Europe. In the EU market, in addition to CE certification, each member country also has its own certification, such as Germany's Tè­ˆV certification, Italy's State Grid's DK5940 certification. If the product does not pass the corresponding certification, it will not be able to enter the local market, and the certification process is complex, the test is strict, and the cycle is long.

2. The technical trade measures of the machinery industry are no longer limited to a single standard, and the cross-industry influence is constantly emerging.

In the 1990s, technical trade measures focused on individual technical standards for a specific product. However, in recent years, TBT measures have formed a system of technical trade measures that affect a industry or even a number of related industries, consisting of a series of technical standards and conformity assessment procedures. For example, the European Union's Waste Electrical and Electronic Equipment Directive (WEEE Directive), the Directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS Directive) covers large household appliances, small household appliances, information and communication equipment, consumer products, and lighting. There are 102 kinds of products in 10 categories, including equipment, electrical and electronic tools, toys, leisure and sports equipment, medical equipment, testing and control equipment, and vending machines. The EU Ecodesign Design Directive intends to select heating and hot water equipment, electric motor systems, home and commercial lighting systems, home and office office equipment, personal electronic products, ventilation and ventilation from 57 energy-consuming product lines from 2009 to 2011. 24 product lines, such as air-conditioning systems, are given priority in formulating corresponding implementation measures. The US Public Health and Safety and Bioterrorism Preparedness Act imposes stringent requirements on the standards for the production, processing, packaging, and storage of human or animal foods. These standards or bills will have a profound impact on the development of China's and global machinery industry directly or indirectly.

3. The impact of technical trade measures supported by intellectual property rights such as patents on China's machinery industry is becoming increasingly apparent.

At present, high technology has become an inevitable trend in the development of science and technology in the machinery industry, and a large number of manufacturing technologies and products with high technology content are constantly emerging. Among them, system integration innovation has become an important innovative way of technological development in the machinery industry, and information technology has become an effective means to improve the technological level of the machinery industry. The integration of information technology and high technology enables intellectual property rights such as patents to quickly enter the machinery industry and integrate with the technical standards of the machinery industry. This not only further increases the trade costs, but also makes it more difficult for Chinese companies to deal with technical trade measures. Even patent protection of laboratory data.

Analysis of the reasons for the impact of technical trade measures on China's machinery industry

In recent years, in order to protect the domestic market, major developed countries have adopted more subtle and discriminatory trade protection measures such as technical trade measures and green trade barriers, and bilateral or multilateral trade frictions with China have gradually increased.

1. The sustained and rapid growth of China's foreign trade strengthens trade partners' awareness of trade protection

With the acceleration of industrial restructuring in the world, the international division of labor in the machinery industry has been further strengthened, and the share of “Made in China” goods in the global market has been rapidly expanding, giving manufacturing to developed countries with higher production costs. It has brought shocks and triggered the spread of the "Made in China" threat on a global scale. Therefore, the more concealed technical trade measures naturally become a favorable tool for restricting the import of Chinese products.

At the same time, although China has become the world's largest foreign investment, the quality of foreign investment is not high, mainly concentrated in labor-intensive and capital-intensive industries with low technological content. China's products restricted by technical trade measures are precisely concentrated in these comparative advantage industries, reflecting the intention of developed countries to protect their domestic relatively disadvantaged industries in the process of international industrial transfer.

2. Export of machinery products is over-reliant on key markets, and the added value of export products is low.

The United States, the European Union, Hong Kong, and Japan are the main markets for China's exports of machinery products. Exports to the United States, Japan, and the European Union account for more than half of China's exports of machinery products. These three major economies have established a large number of strict technical standards and regulations, most of which are higher than international standards. At the same time, although the export commodity structure of China's machinery products has been improved to some extent, the export of some high value-added and technology-intensive machinery products has grown rapidly, but there is still a lack of pillar products with stamina. At present, China's self-owned brand products account for a small proportion of exports, and some products, especially high-end products, are limited to processing or assembly, and only a modest processing profit is obtained. The low price of export commodities is easy to attract trade remedy investigations in importing countries, hindering the further development and penetration of the international market.

3. The construction of China's technical standardization system is relatively lagging, and there is a lack of understanding of foreign technical trade measures.

At present, China has national standards, local standards, industry standards and enterprise standards in product quality management. These standards are cross-cutting and unclear, and most of these standards are lower than international standards or not in line with international standards. The Ministry of Science and Technology’s survey of a number of export enterprises in the three coastal provinces and cities shows that from the impact of foreign technical trade measures on corporate exports, they believe that they have suffered technical trade measures because “the information is not working and they do not know that the other party’s regulations have changed. The enterprises account for more than 1/3 of the total number of companies surveyed. It can be seen that quite a number of enterprises are constrained by technical trade measures due to insufficient understanding of the technical standards of trading partners.

Fourth, correctly view the impact of technical trade measures on China's machinery industry and promote enterprises to improve their competitiveness

Technical trade measures constitute obstacles to market access, restricting the export of China's machinery products, leading to an increase in the export cost of machinery products, thereby weakening international competitiveness; at the same time, the interests of machinery products export enterprises are lost, disrupting the industrial development environment. However, technical trade measures can also promote enterprises to carry out technological innovation, promote enterprises to carry out management innovation, encourage enterprises to pay attention to the rights and interests of workers and consumers, and promote enterprises to raise environmental awareness. Therefore, we should focus on the rationality of technical trade measures and promote better and faster development of trade without sacrificing important economic and social goals.  

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