Export to domestic sales will help to form new trade advantages.

At present, many countries are struggling to find a "balance" between epidemic prevention and control and restarting the economy. The impact of the epidemic on the demand side has caused the global international trade to shrink and the downward trend to intensify. In the second quarter of this year, the global goods trade prosperity index released by the World Trade Organization (WTO) continued to fall to 87.6, a new low since the index was launched. Recently, the WTO predicts that global trade will shrink by 13% to 32% this year.

Faced with the sharp drop in orders from the international market, the backlog of domestic stocks, insufficient start-up and possible capital chain breakage, one of the important measures for foreign trade enterprises in China to hedge this situation is to sell their exports to domestic markets. From the proposal of "effective integration of domestic and foreign trade" to "coordinating the development of domestic and foreign trade", to "deploying and supporting marketable export commodities to open up the domestic market", and then to the launch of "Implementation Opinions on Supporting Export Products to Domestic Sales" by the General Office of the State Council, the China Municipal Government has formed a brand-new road map to support export products to domestic sales.

Export to domestic sales has a trade diversion effect. The transfer of high-quality export products to domestic market has changed the traditional trade flow, but it has not formed a substitute relationship with the existing domestic market. The reason why it can produce the effect of trade diversion is that China has a huge domestic market, a large population and huge consumption potential, and the growing domestic demand for high-quality and high-level products shows a steady growth trend. In this context, the trade diversion effect caused by the transfer of high-quality export products to domestic sales can just fill the gap that domestic products can not fully meet domestic consumption demand in the past. While meeting the domestic consumption demand, the design and manufacturing level of existing products in China will be promoted by trade transfer, thus forming a virtuous circle of product upgrading and stimulating domestic consumption demand.

Export to domestic sales forms a trade creation effect. The transfer of high-quality export products to domestic market can bring structural changes to the original domestic production of products with low production efficiency and high cost, which is only part of the embodiment of trade creation effect. The most important thing is that foreign trade enterprises try to solve the problems of expanding sales channels, turning production lines, brand building and so on in the process of converting exports to domestic sales, and realize the reform of design, production and sales models, which is actually the reconstruction and reshaping of the lifeline of enterprises. According to the "Implementation Opinions on Supporting Export Products to Domestic Sales", the government has launched many targeted measures to promote the development of "the same line, the same standard and the same homogeneity", strengthen credit insurance and financial support, and improve the convenience level of domestic sales, which will further promote the market-oriented flow and allocation of production factors such as raw materials, technology, services, capital and personnel, thus helping various enterprises to enhance their innovation and development capabilities, and promoting the pace of optimizing industrial structure with trade creation effect.

Export to domestic market releases trade promotion effect. China’s new round of consumption upgrading has just begun, and there is huge consumption space worth exploring. The transfer of high-quality export products to domestic market will help to further enrich the market supply, increase consumers’ choices, especially promote the consumption of ordinary households and rural areas by sinking the market, accurately meet new consumer demand, promote consumption upgrading, and further enhance the efficiency and benefit of economic development. In particular, the segmented consumption in different fields and at different levels actually provides a huge market space for all kinds of products, including products that are exported to domestic market, and the satisfaction and upgrading of this kind of consumption in turn promotes enterprises to actively produce specialized (industry) fine (product) tip (end) special (color) products, promotes high-end market consumption, and truly upgrades trade and consumption.

Under the epidemic situation, promoting the export products of foreign trade enterprises to be sold domestically, effectively connecting domestic and international standards, and opening up the double circulation of domestic and foreign markets can not only open up new development space for foreign trade enterprises, but also help to improve the domestic business environment and fully release China’s super-large market size advantage and domestic demand potential. While the export products are sold domestically as "Made in China", focusing on global resources and markets, and making better use of domestic and international technologies, talents and management, the new path of steady transformation from OEM to R&D, from imitation to innovation, and from "manufacturing" to "intelligent manufacturing" will also become a "stabilizer" to promote the effective penetration of domestic and foreign trade and smooth the supply chain of the global industrial chain, thus enhancing China’s new advantages in international foreign trade competition.