Affected by the new coronavirus epidemic, China’s low-voltage electrical appliance industry faces many difficulties in “going out” in 2020. In 2021, as the domestic epidemic prevention and control has become normal, enterprises will resume work and production in a comprehensive and stable way, overseas customers will book inventory for the sales in early 2021 (Spring Festival), and China’s low-voltage electrical enterprises will have sufficient orders in hand. Zhang Sen, secretary-general of the low-voltage electrical branch of the China Chamber of Commerce for Import and Export of Mechanical and Electrical Products, expects that China’s low-voltage electrical exports will increase by about 8% in the first half of the year.

Customs statistics show that in 2020, China’s low-voltage electrical exports of 17.38 billion US dollars, an increase of 7.0%; Imports reached US $14.95 billion, up 2.3% year-on-year; The trade surplus was $2.43 billion, up $800 million from 2019. Since April 2020, China’s low-voltage electrical exports have achieved positive growth for nine consecutive months, including exports of 1.92 billion US dollars in December, a sharp increase of 19.5% year-on-year. “The normalization of domestic epidemic prevention and control has ensured the normalization of production and exports of enterprises, the return of overseas orders, and the online Canton Fair has been held as scheduled, promoting the continuous positive growth of China’s low-voltage electrical exports.” Zhang Sen said.

China has become the world’s largest manufacturer of low-voltage electrical appliances. Most of the world’s famous low-voltage electrical appliance manufacturers have set up production bases in China, and most parts manufacturing has been localized. “China’s high-quality low-voltage electrical parts suppliers have supplied parts and accessories to foreign low-voltage electrical manufacturers, and China occupies an important position in the global low-voltage electrical field.” Zhang Sen said.

In 2020, the exports of China’s low-voltage electrical appliances to countries along the “Belt and Road” such as Vietnam, Malaysia, Thailand and Saudi Arabia were less affected by the epidemic, and the growth was significant, with year-on-year growth of more than 20%.

In 2020, China’s major importers of low-voltage electrical appliances are Japan, Germany, South Korea and the United States, accounting for nearly half of China’s total imports of low-voltage electrical appliances. China has been able to control the epidemic effectively, its enterprises have resumed work and production, and its orders are full. Many semi-finished products and parts from overseas are shipped to China for processing and assembly and then exported to the world. The guarantee of domestic production capacity has increased the demand for imports.

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With the development of domestic brands to the high-end market, domestic low-voltage electrical products will gradually achieve import substitution. “The market structure of low-voltage electrical appliances will develop to a spindle shape, and the high-end and mid-end market of domestic low-voltage electrical appliances is expected to continue to expand.” Zhang Sen said. With the continuous development of the economy and the continuous improvement of people’s living standards, the demand side will have higher and higher requirements for low-voltage electrical appliances. The low end of the market is shrinking and small businesses that lack research and development capabilities are dying out. Some domestic industries show a trend of accelerating the penetration of the low-end market to the high-end. In addition, the original high-end market of domestic leading enterprises technology research and development strength continues to accumulate, product safety and reliability continue to improve, in terms of product lines and market layout initiative to move up the high-end market.

Under the severe and complex foreign trade development environment and the impact of the novel coronavirus pneumonia epidemic, in 2021, China’s low-voltage electrical appliance foreign trade enterprises face many difficulties.

“At present, in addition to a few leading enterprises in China’s low-voltage electrical appliance industry, most enterprises are still in a labor-intensive industrial ecology, and enterprises have problems with labor difficulties.” Zhang Sen said that the low-voltage electrical appliance industry is under great competitive pressure, product homogenization is serious, and enterprises lack a large number of high-level technical personnel and management personnel. Some enterprises said that 1/3 of the outsourcing employees, although flexible recruitment to a certain extent can slightly ease the labor pressure, but because the low-voltage electrical enterprises customers more scattered, all kinds of user needs of products printing, packaging differences, personalized orders are not enough to support the operation of automated workshops, it is difficult to effectively solve the problem of labor.

Affected by the fluctuation of raw material prices, China’s low-voltage electrical enterprises have increased operational risks. Copper is one of the indispensable raw materials for low-voltage electrical products, and the rising price leads to an increase in business operating costs. “It is expected that the production cost of low-voltage electrical appliances companies will rise by 10 to 30 percent.” Zhang Sen said. At the same time, in recent months, the uneven global economic recovery and the sharp rebound of the epidemic in many places in the world have led to rising export transportation costs, which is also a major challenge plaguing low-voltage electrical enterprises.

In addition, although the company has sufficient orders in hand, but the uncertainty of the external environment has the risk of customers canceling orders at any time, some low-voltage electrical enterprises worry about more orders, more investment, and later customers will cancel orders, which will lead to a shortage of funds and other business risks.