BEIJING, Sept. 24 (Xinhua) -- China's foreign trade
and export enterprises have encountered unprecedented pressure during the global
financial crisis -- but analysts say they believe innovation is the way out for
the "Made in China" brand.
The Quanzhou Baofeng Shoes Company, one of China's
leading producer of slippers, is precisely the type of exporter that should be
on its knees. Headquartered in Quanzhou, a coastal city in southeastern Fujian
Province, Baofeng used to export 90 percent of its annual output to the United
States.
The company's exports fell about 20 percent from a
year earlier in 2008 but the situation improved after the company put efforts
into developing its domestic market, moving up the value chain and building its
own brand, the company's general manager, Zheng Guozhang, said.
"Innovation is the key to a company's success," Zheng
said. In this company of 1,000 employees, more than 100 are working on research
and development.
Zheng expects exports to start picking up no later
than the second half of 2010.
It is a similar story in southern Guangdong Province,
the world's largest base of toy production and exports. Customs figures show
products of self-owned, independent brands have achieved better and faster
growth than those without independent brands.
Guangdong's toy exports from self-owned brands
expanded from January's 48 million U.S. dollars to 100 million U.S. dollars in
July, up 41.4 percent compared with June.
While Baofeng might be surviving rather than
thriving, its performance is encouraging, considering wider pain across China's
export sector.
Exports, one of the three engines that have fueled
China's fast growth in recent times, fell 22.2 percent year on year in the first
eight months this year. The other two engines are investment and consumption.
Some export companies had to close or shut down
production because of falling orders, which caused millions of job losses.
Analysts believe the global financial crisis and its
aftermath have revealed long-existing problems in China's export sector -- lack
of independent brands and technology innovation. However, the crisis also
offered an opportunity for transformation.
The opportunity is costs for innovation are low, said
Lin Jiang, head of the Public Finance and Taxation Department of Lingnan College
of the Sun Yat-sen University.
China's export companies are facing stern challenges
both at home and abroad and these would persist into the post-crisis period,
said Zhang Yansheng, director of the Institute of Foreign Trade of the National
Development and Reform Commission, China's top economic planner.
Exporters had to suffer falling orders and increasing
protectionism from outside while internally they had to go through painful
transformation, Zhang said.
To survive the challenges, domestic enterprises must
transform from the traditional labor-intensive and capital-intensive production
methods to technology-intensive, and move from imitation to innovation, he said.
"By using today's difficult economic environment as
an opportunity to upgrade research and development organizations, focus,
practices, and management will help companies not only to cut costs but also to
raise productivity and speed up marketing --while positioning themselves for
even greater success in the future," according to a report from McKinsey and
Company.
However, entrepreneurs and economists are not the
only people to have realized the importance of innovation,. Chinese officialdom
has repeatedly hailed innovation.
"To overcome the severe international financial
crisis, we must rely more on science and technology to make breakthroughs and
boost development," Premier Wen Jiabao said when delivering an opening speech at
the Summer Davos on Sept. 10 in northeastern China's Dalian.
"We should see scientific and technological
innovation as an important pillar and make greater efforts to develop new
industries of strategic importance," he said. "We will make China a country of
innovation."
Special
Report: Global Financial Crisis
