The Study On Competitive Advantage Of China’s Stated-Owned Foreign Trade Companies

China’s state-owned foreign trade companies (hereafter referred as CSOFTCs), established inthe planned economy period after new China was founded，had made a great contribution to breakthe economic blockade from hostile forces abroad, and promoted the development of China’sforeign trade. But as the paces of nation’s reform and opening policy, China’s foreign trade systemhas also been greatly changed. Original advantages of the CSOFTCs from government support wereweakening. Moreover, the double pressures from foreign enterprises and domestic manufacturersmade original competitive advantages of the CSOFTCs deteriorating. In2004, China completelyliberalized the foreign trade, the CSOFTCs‘s policy support was all gone, So the CSOFTCs had tofind their way for survival. Many people are pessimistic about the future of the CSOFTCs, eventhink the companies would disappear. However the author opposes the opinion, thinking that thebad situation may be converted into positive outcome that gives CSOFTCs opportunities. Thereforethe author’s opinion shall be supported by the following five aspects.First, the CSOFTCs essentially are of circulation type using operation capital. Their business isbeneficial to the society linking the manufacturers and markets. So the social efficiency isimproved.Second, according to the transaction cost theory, the CSOFTCs can help to reduce the markettransaction costs, including search costs, contracting costs, etc.Third, since the CSOFTCs are state-owned, having been long engaged in the international market development, has a large number of foreign trader have rich knowledge of the talentadvantage, accumulated a wealth of experience in international trade, familiar with internationaltrade rules, can effectively avoid various trade risk. And because the CSOFTCs in the internationalmarket always show responsible image, therefore, they are in the international market has a goodreputation. State-owned foreign trade companies in the support of national policy had a great scaleadvantage to change our country foreign trade import and export order confusion.Fourth, according to the value chain theory, it can be known that the CSOFTCs is faced withthe plight of the most fundamental reason is that it didn’t become a value chain management, whichdid’t involve development design, brand, investment and financing and so on,in the low of the valuechain.Fifth, core competitiveness of the CSOFTCs are the internal management, trade creationservices, value-added services, it is the cornerstone of the development of the talents, capital, credit,information, channels.Development of the core competitiveness of the CSOFTCs to countries in the legislation,intermediary service organizations, government ministries, such as customs, taxation,administration of foreign exchange, inspection and quarantine of the coordination. It is necessary tomonitor foreign trade industry order, and gradually establish a credit system, perfect the exitmechanism of foreign trade.Future of the core competitiveness the CSOFTCs should be diversified, in scale, industrial andinternationalization direction. This is the realization of our strong trader from a big trader to the inevitable requirement.Of course, it also must be realized that China is a big country with an unbalanced economicdevelopment and a complicated situation. Therefore the CSOFTCs cannot be unified to the sameheight, but only be performed according to local conditions and their own strategic objectives, formaking steady and sustainable development.