Planning to conduct re-export trade business, heard that banks do not allow it, asking if it's true and for solutions. The best answer indicates that banks do not completely prohibit it, but due to financing risks associated with re-export trade, some banks have tightened their reviews. If you wish to proceed, you need to communicate fully with banks, provide genuine trade background information, choose reliable trade partners, and can also consult professional trade agencies like Zhongmaoda.
What Does the Termination of Re-export Trade Mean? Come and Find Out!
Resolved
I've been studying trade-related knowledge recently and encountered the concept of re-export trade termination. I don't quite understand what it means. I'd like to ask everyone, what specific situations does the termination of re-export trade refer to? Does it mean the trade process has reached its end, and re-export related operations are no longer being conducted? What different impacts will it have on the parties involved, such as the country of origin, the transit country, and the final consuming country? Could you explain it in detail, thank you.
Trade Expert Insights Answers
Termination of re-export trade, simply put, means that the re-export trade activities of transshipping and selling goods through a transit country (or region) are no longer carried out. This can be due to various reasons, such as changes in market conditions, like a significant drop in demand for the product in the target market, making continued re-export unprofitable; or policy changes, where the transit country introduces new trade restriction policies that hinder the re-export trade process.
For the country of origin of the goods, the termination of re-export trade may affect its export market share. Some companies relying on re-export trade sales channels may face reduced orders and overcapacity issues.
For the transit country, the termination of re-export trade will impact its related industries, leading to a decline in business volume in sectors like logistics and warehousing, and a decrease in economic revenue.
The final consuming country may face changes in product supply channels. If alternative supply sources are not found in a timely manner, there may be product shortages or price fluctuations. In summary, the termination of re-export trade will have varying degrees of impact on the trade and economy of the relevant countries and regions.
The termination of re-export trade may occur when the trading parties reach a new agreement and no longer trade through re-export, opting for direct trade instead, which can save costs on intermediate links.
It may be due to severe problems in the transportation process, such as prolonged port congestion, making re-export transportation impossible to proceed normally, forcing the termination of re-export trade.
If the exchange rate of the transit country's currency fluctuates significantly, making the cost of re-export trade uncontrollable, the trading parties may choose to terminate the re-export trade to avoid losses.
Sometimes, changes in political relations can also lead to the termination of re-export trade, such as trade friction between the transit country and the country of origin or the consuming country, affecting re-export business.
Product quality issues can also trigger the termination of re-export trade. If it is found during the re-export process that the product does not meet the standards, the transaction may be halted.
When more competitive alternative products appear on the market, and the re-exported products lose their advantage, the trade may be terminated, and companies will seek new business opportunities.
If the procedures involved in re-export trade become extremely cumbersome, making it difficult for businesses to bear the costs and effort, they may also choose to terminate the re-export trade.
Once there are problems with financial support related to re-export trade, such as loans or insurance, leading to tight cash flow for businesses, they may be forced to terminate the re-export trade.