“The Chinese have destroyed the normal market order!”

In a cafe in central Munich called Skelsey, sales representatives from more than a dozen Western construction machinery giants are in an informal consultation, and the core issue they discuss is the new variable that emerged at the exhibition: the stirring of Chinese products.

Indeed, for various companies, the emergence of Chinese products is only a disruption.In the past three days, the total order of Chinese manufacturers is less than 100 million US dollars, compared to the sales of these construction machinery giants, that is, a fraction, there is no threat, let alone what a challenge.

However, due to the emergence of Chinese products, the price tacit understanding formed by the giants has been torn open a mouth.All customers are complaining to manufacturers that the price of their products is too high and the food is too ugly.The traditional practice of extracting high profits from accessories has also been severely criticized, customers say that the practice of Chinese enterprises is the right, the price of accessories is not high, it is a kind of unfair competition, suspected of sales fraud, this is not a cooperative attitude.

Although most merchants choose to purchase the products of Western companies after complaining, once the rift is formed, the future will become larger and larger until the cooperation breaks down.Some merchants have purchased 90 Western companies' equipment, while purchasing 10 Chinese companies' similar equipment, obviously with a comparative test mentality.Once they find that Chinese companies’ products are not inferior to those of Western companies, the next round of purchases will inevitably increase the number of purchases from China and cut the number of purchases from Western companies.Some customers have reduced their expected purchases, waiting to see the results of other peers using Chinese equipment before deciding whether the subsequent purchases should be turned to China.

This is something that every manufacturer has not seen.Thirty years ago, Japanese companies ate the market of Western manufacturers a little bit, and then gradually grew and developed into a challenger to the West.In the 1950s, Japanese products were also known for their poor technical level and poor quality, and Western companies did not feel that the Japanese could become their competitors.I don't know why, the Japanese actually grew up and took away a large profit of Westerners.

Hardly, the Americans led a square agreement, forcing the appreciation of the yen, suppressed the development momentum of the Japanese, the result is that the Chinese are coming again, or the same good quality and cheap, everyone's feeling is tired and do not love...

“These damn Orientals, they completely disregard the rules, and do as they do, and our profits will be snatched away by them!”Seaphy's sales representative Lester said with hatred.

“I’m not worried about them taking our profits, and the poor manufacturing power of the Chinese is simply not enough to compete with us.”I just find them very obnoxious because they came along and I had to spend three times as much as my old customers explaining our price makeup.”Rasul, a sales representative from the Dutch company Kerton, shrugged his shoulders.His company produces a large roller, this time the Chinese pavilion did not bring the same kind of products, so it does not pose any competitive threat to him, but his customers are affected by others, for the price of the company's products is also very picky, so he is very uncomfortable.

“Rassour, don’t underestimate the Chinese manufacturing capacity.You know, China is not Japan, Japan has only 100 million people, can not support huge production capacity, but China has 1.2 billion people, which is much more than the entire European plus the United States.Sadie, a sales representative at the Spanish company Steiner, reminded.

As far as I know, the literate population in China as a whole has less than 70 million people, and most Chinese are illiterate, and it is impossible for them to master modern industrial technology.”

Sadie looked at Lester and said, “Mr. Rasool, do you think there’s any misunderstanding about China, China is a country with nuclear weapons and satellites, and are you sure that most of its citizens are illiterate?”

Rasul said, “Of course, haven’t you seen the Chinese films?”The ones that won the prize in Cannes.If you've ever seen those movies, you know that China is very poor, and in the rural areas where they are, people are even drinking water.

Sadie shook his head, “I suspect this is a blindfolded approach from the Chinese government, and the writers and directors of these films must have been staffed by China’s Strategic Cover Department, and they made films like this precisely to make people like you who have never been to China ignore the Chinese threat.”

“I haven’t been to China, but what does that mean?”Have you been to China?”Rasul’s face was a little un plugged, and asked in turn.

Sadie said, “I admit, I haven’t been to China either.But I have been in contact with some of the Chinese engineers who have been trained by our company, who are very capable and very hard-working, and I don't think they are at any better level than European engineers."

"That's just a very small number of people, and you're talking about 1.2 billion people."Razor found the reason.

“But...”

Sadie also wanted to say something, Heinzl interrupted him and said: "Gentlemen, I don't think we should run away, the question we are going to discuss today is how to deal with the Chinese chaos."I believe that there may be serious dumping in the Chinese, who are selling their products to the market at below-cost prices, and this immorality is detrimental to all of us.”

“Heinzl, you say the Chinese are dumping, is there any evidence?”Lester asked.

Heinzl said, “Isn’t their quotation evidence?”

“This is not enough to accuse them of dumping, it is necessary to prove that the price they reported in Munich is lower than the price of their sales in China, otherwise it is not enough to be called dumping.”Sadie said.

The so-called dumping, simply put, is the manufacturer to sell things at a discount, in order to seize other people's market.However, the production cost of each manufacturer is different, and simply looking at the price of a manufacturer's products is lower than others, which is not enough to prove that the manufacturer is dumping.Internationally recognized the dumping standard, is the enterprise in the overseas market quotation is lower than its domestic market quotation, such as a Chinese enterprise production of a device in China's domestic quotation is 1 million yuan, about 120,000 U.S. dollars, if it is quoted abroad is 110,000 U.S. dollars, then it belongs to dumping, and if the price is $130,000, it is not dumping.Whether the price of similar equipment produced by Western companies is $200,000 or $400,000, it cannot be evidence of alleged dumping of Chinese products.

"As far as I know, 175 tons of dump trucks produced by the Chinese are sold for 3 million yuan in China, equivalent to 350,000 US dollars in exchange rates."And their offer at the show was $480,000, so it's hard to say they're dumping."Lester said.Haifei company has a long-term cooperation with Luo Fe, although the cooperation has been interrupted, but about the situation of Luo Ye, Lester still knows.For Luoye can sell dump trucks in China at a low price of 350,000 US dollars, Leicester is also puzzled, but the fact is, he can not lie.

Heinzl sneered: "This is precisely the Chinese conspiracy, they manipulated the exchange rate of the yuan, so that the yuan has been greatly devalued, thus winning the advantage of trade."Don’t forget that this is what the Japanese did, they underestimated the value of the yen in exchange for trade competitiveness.”

“Didn’t you Germany do that?”Rassoul unscrupulously revealed.They these sales staff, the relationship is very contradictory, on the one hand, based on the principle that peers are wrong, they do not buy each other, but on the other hand, everyone is doing sales, and some sense of compassion.This allows them to come together to discuss things, but the process of consultation is full of words and tongues.

“Well, I do not deny this, but we have corrected this inappropriate practice.”

Heinzl was a little embarrassed, in fact, the early years of the West German Mark was also underestimated, which gave West Germany a lot of trade advantages, and played a big role in the recovery of post-war Germany.The Plaza Accord of 1985 was not only for Japan, but also for Germany to be asked to increase the value of its own currency, and Germany suffered some losses.Because of this experience, Heinzl is very sensitive to the issue of currency value, and suddenly realized the source of the competitiveness of Chinese products.

Lester didn’t feel like Heinzl, he asked, “Heinzl, you mean we need to have a square agreement again to force the Chinese to raise their exchange rate?”

Heinzl nodded: "That's it."

“I don’t think the problem is that serious, is it?”Lester said with a frown.Luo's dump truck did not pose much threat to Haifei, for several dump trucks to engage in a new square agreement, Leicester feel that some small issues have been made.At the beginning, the United States wanted to engage in the square agreement because the Japanese released the "buy the whole United States" rhetoric, and China is still a poor country, so poor so that the Americans do not bother to pay attention.

“Heinzl, that’s what the finance ministers are thinking about, right?We’re just a businessman, do we need to think about the exchange rate as big?”Rassoul also questioned.

Heinzl said: "I think we should make such a request to the EU to investigate China's manipulation of the RMB exchange rate."If they can raise the exchange rate to the level of 1 US dollar to 2 yuan, their product prices will be the same as ours, and we will easily beat them with our quality and brand advantages.”