The Research of the Influence of Financial Crisis on Export of Household Electrical Appliances in China and Its Countermeasures

The Research of the Influence of Financial Crisis on Export of Household Electrical Appliances in China and Its Countermeasures

In today’s economic globalization development, Economic interactions between countries tie more closely. During the period between outbreak of financial crisis in February 2007 and the October 2008, financial crisis has experienced transition from virtual economy to the real economy conduction. At the same time, as a result, the financial crisis known as U.S. subprime mortgage crisis has a great impact on the development entities in real economy. Household Appliance Industry in China is a very important part of the real economy.

Export is the important component of our Household Appliance Industry. Under this circumstance, therefore, the impact of the financial crisis on the export of the household appliance should be evaluated correctly and sound solutions should be given.This paper is divided into 5 chapters. In chapter one, the research background and theoretic and pragmatic significance is discussed; the cause of financial crisis, financial crisis transmission mechanism and the impact of financial crisis on economy summarized; the main content of the paper argued. In chapter two, fundamental theories that are relative to the topic of this paper are discussed.

The theory of degree of dependence on foreign trade is used to certify the great degree of dependence on foreign trade with other country. The transmission mechanism of financial crisis is utilized to justify why trade protectionism has emerged and why obvious impact on the export of household appliance could be seen until October 2008. Only through the application of those fundamental theories, can the research on export of household appliance in our country be supported. Because of the support of these theories, the study of Chinese Household Appliance export is reasonable.In chapter three, the status quo of the export of household appliance in china is fully discussed.

The important elements of the status quo is consisted of the history of the development of household appliance, today’s technological level, some factors that are used to evaluate the export of household appliance, which are the volume of production and export, the current climate index weather, and sales in different regions of china. In chapter four is one of the main chapters in this paper. The impact of financial crisis on household appliance industry in china is discussed in this chapter. In this chapter, the impact of financial crisis on household appliance industry in china is discussed through the comparison of orders and volume of export before and after the financial crisis.

The cost of household appliance enterprises in china has raised a lot because of the following reasons: the rising cost of raw materials, ascending cost of litigation originated from conflicts caused by trade protectionism and rising cost of upstream industries. Quantitative means of research has also been harnessed to show the degree of impact of financial crisis on household appliance industry in china. The indispensable elements that cause the impact of financial crisis on household appliance industry in china, such as purchase power of consumers and impacts of employments in china, is also argued in this chapter.Chapter five is also one of the important chapters of this paper.

The main purport of this chapter is to give solutions to the predicament of household appliance industry in china caused by the financial crisis and to discuss some relative strategies using both micro and macro perspectives. In macro perspective, strategies taken by the government is discussed.

Those strategies are consisted of augmenting domestic demand for household appliance in china and promoting sales in homeland, increasing the public investment by government and consolidating infrastructure; increasing the degree of carrying out the strategy of “March out”, and improving the welfare of our people. In micro perspective, the way household appliance enterprise should reflect on the current situations is argued in this chapter. For one thing, they should prepare themselves actively to cope with the dilemma and protect themselves from crisis.

For another, they should pay more attention to technological innovation and environmental protection, to lowering the cost of production during the products competition in the future, to improving the quality and product level, to upgrade and transition, and to the effort necessary to make their product well-known brand.In all, financial crisis has a great impact on the export of household appliance products in china.

This is not only because of reasons that lie outside, but also because that there are still some deficiencies within our household appliance products. Thanks to the counteracting strategies, the impact of financial crisis on our household appliance industry has smoothed out, nevertheless, as for the problems caused by lack of innovation and world famous brand, a great deal of efforts are still demanded from our household appliance enterprises.

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