For every 10 durians imported by China, six pass through here

China News Weekly reporter / Wang Yu

Published in 2023.11.20 Issue 1117 of China News Weekly magazine

In late October, the foreign trade data for the first three quarters was released. Among the top 10 cities in terms of total import and export value, an unfamiliar name - Guangxi Chongzuo - is far ahead of the growth rate with a value of 40.41%.

Locals say that the core of Chongzuo is in Pingxiang. Pingxiang is located in a north-south stretch of karst peaks and valleys, this county-level city managed by Chongzuo, with a total population of less than 13,140. However, because it is only about <> kilometers away from Hanoi, the capital of Vietnam, and a two-hour road drive, it has become the "southern gate" of China connecting Vietnam and a friendship gate, which has long supported Chongzuo's foreign trade data.

In the first three quarters of this year, the total value of goods imported and exported through the Friendship Customs exceeded 3250 billion yuan. Among them, the total import and export of goods through Pingxiang local enterprises was 1311.4 billion yuan, with a growth rate of 41.9%, accounting for more than 80% of the total import and export volume of Chongzuo.

At 8 a.m., trucks waiting in line on both sides of the border began to clear customs. The traffic flow is too large, and the customs clearance time has been delayed again and again.

As the most convenient land passage between China and Vietnam and even the entire ASEAN, the Friendship Pass has a designed customs clearance capacity of 1200,1500 trucks per day, but China's exports of mechanical and electrical products and daily necessities are more than equal to Vietnam's agricultural products and consumer electronics, and the flow has long exceeded the carrying limit of the port. Today, <>,<> trucks carrying containers come and go here every day.

Half of the tropical fruits imported from ASEAN pass through here. Large quantities of Thai durians also arrive in China via Vietnam, and for every ten durians China imports, six pass through Pingxiang. On January 2022, 1, the Regional Comprehensive Economic Partnership (RCEP) officially entered into force, and eight months later, Vietnamese durian, along with Myanmar bananas and Cambodian longan, was approved to enter the Chinese market for the first time, further stimulating the growth of customs clearance volume.

Another driver of growth is related to Vietnam. A two-hour drive from the Friendship Pass into Vietnam will take you to the Red River Delta Plain, which is home to Hanoi, the capital of Vietnam, and is surrounded by ports and industrial towns such as Haiphong and Bac Ninh. In 2022, Vietnam's economy grew by 8.02%, making it one of the fastest growing economies in the world, and the Red River Delta, which accounts for about 30% of the country's GDP and total fiscal revenue, is Vietnam's "national economic locomotive and largest growth engine".

Foreign capital has set up electronics factories in northern Vietnam, but supporting industries are concentrated in China's Yangtze River Delta and Pearl River Delta. Electronic components are routed to the Red River Delta via the Friendship Pass, where they are assembled by local factories and exported to the world.

A huge flow of traffic is flowing through Pingxiang, but the locals of Pingxiang seem alienated and at a loss for this. Carry traffic, service traffic, but the traffic does not stop for Pingxiang.

A bystander of durian

This is a warehouse hidden in a remote alley, and every night at half past seven, the live broadcast begins. Jackfruit, mango, whatever you have at the port, you can sell anything, but durian is the absolute main force.

The boss is from Beijing and has enough financial strength. The warehouse receives durian by cabinet, and in the evening, the freshest durian in China is sold to all parts of the country by the young Pingxiang local anchor. In the peak sales season, the store sells more than 2000,<> orders per day, and the turnover is as high as hundreds of thousands of yuan.

Zhang Lihuan, one of the anchors, told China News Weekly that Thai durian is a seasonal product, and there are many shipments in summer, which ends around October, when Vietnamese durian shipments happen to fill the vacancy of Thai durian. When the amount of durian in Vietnam was low, he began to make Malaysian durian again. In short, it can be sold all year round. In addition to the well-known Musang King and Golden Pillow known to Chinese consumers, selling durian for three years, Zhang Lihuan has also mastered the selling points of less well-known varieties such as Qingni, Jialun, and Long Handle.

But in Pingxiang, making full use of the advantages of "the first stop of durian entering the customs" to make the store unprecedented, this may be the only one.

After the RCEP came into effect, China approved the export of Vietnamese durian to China. On September 2022, 9, the first batch of Vietnamese durians cleared customs at the Friendship Pass port. In January ~ September this year, a total of 19,1 tons of fruits entered China through the Friendship Pass port, a year-on-year increase of 9.64%. In the first half of the year, 5,152 tons of durian were imported through the Friendship Customs, with a value of 5.31 billion yuan, a year-on-year increase of 2.105 times and 6.13 times respectively, accounting for 1.11% and 5.81% of the imported fruits at the port. According to Lu Kezong, a staff member of the Pingxiang Municipal Bureau of Commerce and Port, as of the end of October this year, the import volume of Pingxiang durian has exceeded that of last year, with a growth rate of more than 8%, of which Thai durian and Vietnamese durian account for half each.

"Friendship Customs has built a special channel for imported durian at the port", "In the face of the huge demand for fresh durian imports, Chongzuo plans to build a cold chain and processing plant", and the growing import volume of durian has pushed Pingxiang into the focus of media attention. Looking at Pingxiang from a distance, the huge volume of customs clearance seems to be pushing the city to move around durian.

But contrary to the expectations of the outside world and even the locals of Pingxiang, Pingxiang has not been able to become an active ASEAN fruit distribution center. There is no durian on the street, and there are no merchants coming and going.

Nong Weipeng, deputy director of the Cross-border Cooperation Bureau of the Chongzuo Area of the China (Guangxi) Pilot Free Trade Zone (hereinafter referred to as the Chongzuo Area), told China News Weekly that six to seven percent of the imported durians are ordered by distributors from other provinces from the source orchards, and after passing the customs, they will go straight to the consumer markets of rich provinces and cities such as Guangdong, Shanghai, Zhejiang, and Beijing.

Speaking of durian, Pingxiang's first concern is not the opportunities and economic benefits, but how to cooperate with the customs to ensure the rapid customs clearance of this expensive fruit, reduce the time it takes to delay in Pingxiang, and arrive at its destination in the freshest state.

There are two or three groups of people and a fixed number of inspection positions on the site, and the car comes to the platform, unloads, inspects, and then loads and drives away after inspection, all of which take time. Nong Weipeng introduced that unlike consumer electronic goods that only need to inspect 150%, Vietnam's fruits involve quarantine issues, and almost every car is checked, so in the case of limited customs manpower, only about <> cars can be checked a day, "this is the limit."

Scaling is almost impossible. "Pingxiang was originally a piece of land filled out of the valley, and the working surface was only so large. In addition, because the port is on the border, it is very troublesome to expand the capacity of the two countries. Nong Weipeng told reporters.

"We are a small financial security port." A government official in Pingxiang, who asked not to be named, told reporters that many of the facilities at the Friendship Pass have not been updated and upgraded since they were closed in 2011. "The Friendship Pass is an international port, and the state has special funds to upgrade infrastructure every year, but the local government also needs to raise some of it." Another government worker explained to reporters.

According to the "2022 Pingxiang National Economic and Social Development Statistical Communiqué", in 2022, the general public budget revenue of Pingxiang City was 3 million yuan, a decrease of 7.1% over the previous year, and the general public budget expenditure was 8.20 billion yuan, an increase of 94.0% over the previous year.

According to the above-mentioned anonymous staff, the annual operation and maintenance cost of Friendship Pass is close to 500 million yuan, and the aging problem of pipe network, camera and other equipment is serious. Localities to protect national ports are indeed limited in their capacity.

A huge amount of durian "fell from the sky", Pingxiang felt the pressure, as for what to do with durian, Pingxiang didn't seem to have a clue.

"Since it is a border trade, then Vietnamese fruits should be everywhere in Pingxiang. But where can Pingxiang see durian now? Zhang Xiaoping, a businessman from Guangzhou, is the manager of a Chinese herbal medicine import and processing company in Pingxiang, which attracted investment from Guangzhou through the Pingxiang municipal government and the Chongzuo Area Management Committee of the China (Guangxi) Pilot Free Trade Zone.

"A cabinet of more than one million durians, report it and leave! Whether it is electronic products or fruits, it is just a flow and does not produce retention benefits. The model of freight forwarding and logistics companies is to raise fish while releasing water. In Zhang Xiaoping's eyes, Pingxiang is a "pearl on the border", and it should be full of opportunities.

In fact, the current circulation status of durian is determined by its characteristics as a valuable fresh fruit. Durians usually don't start bearing fruit until five years old, which means it's expensive to grow. The average import price of durian in Thailand is about 10 US dollars / kg, and the weight of a single durian is about 1.5~2 kg, "If you buy 50 durians a day, your financial pressure is 6000,7000 yuan to 15,50 yuan." The fastest payment speed on major e-commerce platforms is 10 days, and you have to press at least 25,30 yuan to sell <> durians. Coupled with other operating expenses, there must be at least <>,<> to <>,<> yuan in cash on the account every month. Huang Zhenqi, a durian e-commerce entrepreneur and founder of Jiameng Smart Technology, told reporters.

"In addition to the capital threshold, it takes time to do a good job in the quality control of durian and master the sales channels." Shu Chunyuan, secretary general of Pingxiang Cross-border E-commerce Association and general manager of Guangxi Lia E-commerce Co., Ltd., told China News Weekly. A durian industry practitioner also said that foreign high-quality durian orchards are usually locked from the source by large players with obvious financial advantages, and first-level distributors directly connect with offline supermarket channels in the first-tier market, and there are few opportunities for small enterprises.

When the durian arrived in Pingxiang, it was already eight or nine ripe, and in order to ensure the taste and freshness, the truck should try to avoid delays in the market with small capacity. Pingxiang has a population of only 13,<>, and it is difficult to speak of market consumption power. Pingxiang has not yet been connected to the high-speed railway, except for a small number of buses, there is only one ordinary speed train that takes more than two hours a day to connect with Chongzuo, and the cost of traffic and time determines that it is difficult to become the central node of general trade here.

For a long time, Pingxiang's trade flow relied on the merchants gathered here. Huang told China News Weekly that before the pandemic, a large number of merchants had gathered here to do tropical fruit e-commerce or mahogany business. At the moment, they have not returned.

With Pingxiang's current popularity, it is difficult to digest a whole cabinet of durian, so few distributors are willing to bulk durian, even if it is bulk, because the scale is too small, the price is quite high. Huang Zhenqi, who saw the opportunity of durian in Vietnam, came to Pingxiang in March this year and started to do durian e-commerce.

Construction of industrial reservoirs

A few years ago, the goods from the Friendship Pass to Vietnam were in the following categories: shoes and clothing, bags, daily necessities, Shandong garlic with onions, apples from the north and pears from the north.

Judging from the data, the structural turning point of exports occurred in 2017, perhaps because of Vietnam's revealed labor cost advantages, which promoted the transfer of labor-intensive industries, and the export value of electronic components began to grow rapidly. They are light and expensive, and the value of a truckload of goods is worth dozens of truckloads of agricultural products. "That kind of particularly expensive capacitive sheet may cost tens of millions for a car." Nong Weipeng said. The volume of shoes, clothing, bags and bags has not decreased, but the proportion of the value of goods has dropped from 40% in the past to 5%, in contrast, the proportion of electronic components has climbed to 60%.

The structure of imports has also changed. In the past, the only products shipped from Vietnam to China were watermelon, longan, lychee, mango, and dragon fruit. Since 2017, consumer electronics such as hard drives have also grown rapidly, and now they account for about 60% of the value.

Soon, the Yangtze River Delta, the Pearl River Delta, Beijing, Shanghai and Shenzhen, people who have captured the new trend will set their sights here, and more and more research teams will come to Pingxiang, and the task will follow. In August 2019, the Chongzuo Area was launched, and the Pingxiang Municipal Government and the Chongzuo District Management Committee frequently went to the Pearl River Delta to attract investment around export processing - which is in line with the expectations of the higher authorities for Pingxiang: to build an industrial reservoir on the border.

Pingxiang, who has always been eager to shift from "channel economy" to "port economy", has finally found a way to break through. They have attracted key electronic information companies such as Liangwei and Sannuo, which provide industrial support for multinational companies such as HP and Samsung. In addition, in order to make full use of the import advantages of agricultural products in Southeast Asia, Pingxiang also attracted Yanjin Shop, Shenghetang, Guangxi Baohang and other agricultural and sideline products deep processing enterprises.




The Pingxiang government is also well aware of the problem. Nong Weipeng told China News Weekly that Pingxiang's location advantage as a border port is mainly external, "We are a window, a gateway and a hub externally." But in the domestic consumer market, we are nerve endings. Therefore, it is difficult to find the upstream supporting facilities of the enterprise in the surrounding area, the equipment of the enterprise is broken, and the accessories have to be shipped from Guangdong, and it is very likely that the whole Guangxi cannot be found. ”

But what makes Liu Min anxious the most is the process management of import and export of goods. "In Shenzhen, we do the filing of finished products, and we only need to upload electronic documents in the 'China (Shenzhen) International Trade Single Window', and the system can be approved. But here, we need to print out the paper file, scan and upload it. Liu Min said that the filing of goods is done according to the type and customer, and if the same finished product is faced with four or five customers, it will be filed many times. For the same customer, product fine-tuning also needs to be filed multiple times. In this case, one more process to print, scan and upload means an incalculable amount of work.

"At present, we only have nine production lines in operation in the first phase of the factory, and when the second phase of the plant is completed, it will be 50 or 60 production lines. In Shenzhen, we can process hundreds or thousands of finished products in a day. But to Pingxiang, all filings have to go through the paper file process again, which increases a lot of workload. When the production line is opened, what should the company do? Liu Min's tone was full of anxiety.

Recruitment has also become a big problem for labor-intensive processing enterprises. In the past, the proximity to Vietnam allowed Pingxiang to gain labor cost advantages through cross-border labor services, but due to the impact of the new crown epidemic, cross-border labor services have not been opened up so far, and the population of Pingxiang and the surrounding areas is far from enough to support Liu Min's factory.

"At present, we have more than 9 employees in our nine production lines, basically the surrounding villagers, who are relatively old. Because we produce electronic products, workers sit to work, and the income is relatively stable, and the villagers like to come to our factory. However, when the second phase of the plant is built and the production line is expanded, it may be difficult to recruit thousands of people. Liu Min said.

"It is difficult to recruit workers" has been the consensus of the government and enterprises. Nong Weipeng said that Guangxi is a major labor export province, and younger workers have the need to eat, drink and have fun in addition to working in the factory, and the remote location of Pingxiang's industrial park is difficult to meet the needs of young people for consumption and entertainment after work.

"The companies that came to inspect and the companies that landed all complained. Cross-border labor used to be the highlight of our investment promotion, and it did attract enterprises to land, but now the plan is disrupted. There are cross-border labor services when attracting investment, but there are no more when they are put into production. ”

Another policy that once attracted enterprises to settle in Pingxiang was the border people's mutual market. Pingxiang has a total of five border people's mutual market trade points, distributed in Puzhai, Langyao, Zhaoai and other places. The tariff-free policy of 8000,<> yuan per day for border residents allows Vietnam's raw materials to enter Pingxiang in the most flexible and convenient way and at the lowest cost. "Durian, a high-priced fruit, has a very high inspection cost, and it may cost <>,<> or <>,<> yuan for a container of goods to be inspected. However, through the channel of border people's mutual market, in addition to zero tariffs, inspection and quarantine fees are also low, and one person may be able to get one or two hundred yuan for thirty or fifty pieces. Huang told China News Weekly.

According to the data, from 2015 to 2021, the import and export volume of Pingxiang City's border residents rose from 81.5 billion yuan to 126.6 billion yuan, an increase of 55.3%. However, Nong Weipeng told reporters that after the adjustment of the epidemic prevention and control policy, Pingxiang's mutual market point has not been allowed to open for a long time.

"In terms of other policies and resources, Pingxiang also does not have many advantages. There are more than 100 bonded zones across the country, and the policies are similar. Pingxiang has limited land resources, and the cost of water and electricity is even a little higher than that of other places. "Judging from the investment results, Pingxiang has tried to undertake the industrial chain in the transfer of the Pearl River Delta in the past few years. But when it comes to the role of the industrial reservoir, Pingxiang's officials and companies show a hint of frustration. A number of interviewed companies told China News Weekly that the problems of difficulty in recruiting workers, weak industrial support, and unstable border trade and cross-border labor policies cannot be solved in a short period of time by relying on the efforts of local governments and enterprises.

Can location be an advantage?

Pingxiang people know that Pingxiang's advantage is "location". In the perception of the people of Pingxiang, the best way to use it is through border trade. "Take the goods to the mutual market, no matter what you bring, you can sell them." This is the common memory of the people of Pingxiang.

Shu Chunyuan still remembers that in the 90s of the last century, when the port had just opened, the freight yards of the border people's mutual market were all yellow mud ground, but no one would dislike it, "At four or five o'clock in the morning, I went to the border trade point with my mother carrying the goods."

"It was so easy to make money back then." The driver, Lao Huang, sighed to reporters. Vietnamese border people barter baskets full of eels for trade. Ordinary people in Pingxiang can buy two vans to transport goods in both directions. He still remembers that the price of lobsters in Vietnam is high, and restaurants rush to collect them from border residents, two in one box, two boxes in one car, and the duty-free quota of 8000,<> yuan is used up.

For the Friendship Pass, the border people are in awe, which is the "national pass" and "Zhengguan". In their simple cognition, the mutual market point of the border people is the key that can make them get returns.

But many entrepreneurs know that the bigger opportunity is still on the "right pass". To hang on the value chain of "Zhengguan", the easiest way is to do freight forwarding, in short, to help merchants go abroad to clear customs. "Of the 3250 billion worth of goods, 1300 billion has passed through the hands of our local businesses, and we can earn a little service fee here." Nong Weipeng told China News Weekly.

In 2019, Chongzuo established a cross-border e-commerce comprehensive pilot zone, and closed Chunyuan shifted its business focus to cross-border e-commerce freight forwarding. At its peak, 2020 containers could be sent out in one day.

But it didn't take long for the volume of cross-border e-commerce to begin to decline. "One of the reasons is that the merchant has completed the market test, determined the categories that sell well, and stocked them in batches in overseas warehouses in Vietnam, and the result will be that the income of freight forwarders will be affected." Shu Chunyuan told reporters.

What else can you do if you don't do freight forwarding, or do you want to squeeze into the cross-border e-commerce market? Shu Chunyuan hesitated. "One of the shortcomings of Pingxiang is that the industrial chain is not here. The opportunity for cross-border e-commerce is so big, why are the big foreign trade players we know waiting and watching? "For a long time, e-commerce seems to naturally belong to Zhejiang and Guangdong, which have supply chain advantages.

Li Tianming of Pingxiang Cross-border E-commerce Association argues that Pingxiang's advantages are as follows: "Cross-border e-commerce in Zhejiang, Guangdong and other places is a supply chain advantage, while we are a location advantage. In Li Tianming's view, when merchants in Zhejiang and Guangdong are hesitant to invest in the Vietnamese market due to Vietnam's low customer unit price, the local e-commerce team in Pingxiang does not need to be entangled, and they are more willing to emphasize the vast consumer market brought about by Vietnam's ultra-rapid economic growth.

Under the control of the Pingxiang Cross-border E-commerce Association, Vietnamese anchors broadcast to Vietnamese people in Pingxiang, selling Chinese products. For the leading brands that emphasize the conversion rate, the association adopts the agency broadcast model of commission for cooperation, and for the small and medium-sized suppliers that are still in the testing stage, the association adopts the live broadcast operation model of charging according to the number of sessions. Since it has been on the right track for a year, the value of cross-border e-commerce in the Chongzuo Comprehensive Pilot Zone has reached 25.6 billion yuan.

Border warehouses also have a place to play. The overseas warehouses provided by platforms such as TikTok are convenient for merchants to stock up overseas while ensuring timeliness. However, for merchants who have not completed the market verification, they rashly prepare the goods overseas, and once the test fails, they will have to pay a large amount of freight costs to ship the goods back to China. From this perspective, the border warehouse model can help SMEs control costs and risks.

Shu Chunyuan said that at first, if the goods sent by them were in traffic jams, it would take a week to get out of customs, or a few days. Later, the two sides ran into a cross-border e-commerce green channel that was different from general trade goods, and the customs clearance procedures could be completed in one hour at the earliest. "Compared with the platform's overseas warehouse, we are more flexible. According to the current speed of customs clearance, the timeliness of our border warehouse is no worse than that of overseas warehouses. Li Tianming told China News Weekly.

The border warehouse model began to gain a small consensus in Pingxiang. Nong Weipeng told reporters that at present, large electronic product processing enterprises have set up warehouses for Vietnam in Pingxiang. "The rent of Vietnam's industrial parks is high, but in comparison, we have a lower land cost here and have more advantages in the warehousing sector." He believes that in order to ensure the timeliness of goods arriving in Vietnam, production enterprises in the Pearl River Delta have the incentive to set up border warehouses. Although Pingxiang's land resources are limited, it has the ability to undertake supply chain supporting links by revitalizing the idle space in the urban area and using the existing land in the CBZ.

Some people pin their hopes on the "right pass", while others pin their hopes on the border people's mutual markets. "Zhengguan is the channel for big players." Huang Zhenqi said, "If the mutual market is reopened, we small players can establish our own links, and border residents are also happy to participate." Because as long as he brings the goods in, he can immediately find us to sell them, and small and medium-sized enterprises can also buy bulk goods to save their own costs. Now, imported durians are basically shipped in bulk in Nanning, but when they are sent from Nanning, you can only receive them after at least a week after entering the customs, but from Pingxiang, you can receive them in two or three days. ”

Huang Zhenqi still remembers the scene he saw when he visited Pingxiang in the early years, "It was very lively at that time, on the one hand, because cross-border travel to Vietnam basically had to go out from here, and secondly, Southeast Asian fruits from the mutual market would be sent from Pingxiang to the whole country. From 2018 to 2019, many import e-commerce merchants are here, and there are many entrepreneurs who do cross-border exports."

Now, Pingxiang is back to square one. But in Huang Zhenqi's view, this is precisely the window of opportunity for a new batch of entrepreneurs. It is imperative that Pingxiang gather as many durian e-commerce entrepreneurs as possible to make the durian ecology possible.

(Liu Min and Zhang Xiaoping are pseudonyms in the article)

China News Weekly, Issue 2023, 43

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