Total Import and Export Volume Exceeds 20 trillion in the First 8 Months Demonstrating Great Resilience of China’s Foreign Trade

2019-9-23 9:15:32

In Hunan, since this year, new export orders for smartwatches, smart bracelets, and car touch screens have increased significantly, and quality products have been well received by the market. In Shandong, in the first eight months of this year, import and export of bonded logistics has risen nearly 50%, showing strong vitality of emerging industries … In light of the unsatisfying current global trade trend, many companies have adopted diversified strategies, including expanding multiple markets and measures to improve their core competitiveness, and good foreign trade outcomes were achieved as a result. In the first eight months of this year, the total import and export volume of China exceeded ¥ 20 trillion, and the quality was further improved, which has showed good resilience of China’s foreign trade.

Foreign trade exceeded ¥ 2.5 trillion for 5 consecutive months

On the evening of September 1, the east jetty container terminal of Tianjin Port was brightly lit, as the containers filled with fruits from Vietnam and Cambodia were unloaded in an orderly manner from the container-ship “Seal” of CNC. A spokesman of the company receiving the goods said, the number of orders was 7 or 8 per month 10 years ago, it grows to over 100 orders per month now. The company’s leap-forward development showcased the growth of the Beijing-Tianjin-Hebei consumer market and witnessed the new opportunities for cross-border trade brought about by the facilitation of customs clearance.

Across the whole country, the achievements of foreign trade in recent years are obvious to all. From January to August this year, despite the complicated international situation, China’s foreign trade maintained a stable volume.

Statistics show that from January to August, China’s total import and export volume was ¥ 20.13 trillion, an increase of 3.6%. Among them, the amount of exports and imports were ¥ 10.95 trillion and ¥ 9.18 trillion, up 6.1% and 0.8% respectively. LI Kuiwen, Director of the Department of Statistics and Analysis of the General Administration of Customs, said that China’s import and export in a single month exceeded ¥ 2.5 trillion for five consecutive months, showing strong resilience.

From a global perspective, China’s export growth rate was higher than the overall level of the major economies in the first half of the year according to the latest data from the World Trade Organization (WTO). Affected by factors such as growing trade protectionism, slow global economic growth, and increased geopolitical risks, the recent export volume of many economies has shrunk significantly.

BAI Ming, Deputy Director of the International Market Research Institute of the Ministry of Commerce, said that the current foreign trade performance is generally in line with the requirements for stable foreign trade. When it comes to the single-month rise and fall in this year, BAI Ming pointed out that during China’s previous foreign trade development of quantity, there were many external dividends, and other favorable factors such as low domestic labor costs; but now, as its foreign trade grows in quality, many difficulties emerge, including the rise of factor costs and the pressure from competition with Southeast Asia and trade frictions. Especially in the current international environment, it is normal for imports and exports to go up and down monthly.

Highlights for foreign trade quality improvement

In the first eight months, the quality of foreign trade improved together with the total volume.

International market layout was optimized. China’s imports and exports to emerging markets increased by 6%, driving import and export growth by 3.5 percentage points. Among them, the import and export business with countries along the “Belt and Road” increased by 9.9%, accounting for 29%, up 4% from 2013.

The economic structure was improved. The vitality of private enterprises continued to increase, with exports by them increasing by 13.7%, accounting for 51.2%, and driving the total export by 6.5 percentage points. From January to August, 124,000 private enterprise registrations were added, an increase of 12.4%.

The product structure was adjusted. Mechanical and electrical products accounted for 57.9% of exports. Among them, the added value of integrated circuits, computers and components, motors and generators further increased, and the export unit price increased by 36.9%, 4.1% and 4.5%, respectively. The export of the seven major labor-intensive products increased by 7.3%, of which toys and plastic products increased by 33.7% and 18.2%, respectively.

The modes of trade were changed. General trade maintained strong, with exports up 9.4%, which was up by 1.8 percentage points year on year to 58.8%, and its rate of contribution to export growth was 87.9%.

These changes are not only the demonstration of the improvement of foreign trade quality, but also the promoter of foreign trade to enhance core competitiveness and better achieve the goal of stabilizing foreign trade. BAI Ming pointed out that general trade tends to have a longer industrial chain and more technological content, and it also represents the ability of independent development of a country. The increase in the proportion of general trade indicates China’s foreign trade strength. LU Zhengwei, chief economist of Industrial Bank, believes that the buffer effect of China’s export diversification on trade friction is showing, which helps to better cope with external risks.

Favorable policies stimulate vitality

How will the foreign trade develop for the rest of this year?

Uncertainty is still one of the key words mentioned by all parties. Some heads of foreign trade enterprises said that on the one hand, the global economic is not doing well; on the other hand, competition within industries has intensified, and the export in the second half of the year will still be under great pressure.

In BAI Ming’s view, the trend of foreign trade this year does face a number of uncertain factors, and stabilizing foreign trade will remain the main theme. On the one hand, enterprises should lose no time to improve their competitiveness, especially to upgrade technological level and enhance product strength. On the other hand, foreign trade policies should be further promoted, including the use of taxation and other policy tools, and the enhancement of foreign trade industry basis. From accelerating the building of the Pilot Free Trade Zone to the completion of the 2nd China International Import Expo, a series of policies will play a role to aid the development.

Indeed, as of this year, the foreign trade sector has continued to promote institutional innovation, management innovation and service innovation. The business environment for new business models has further improved, and cross-border e-commerce and market procurement trade maintained rapid growth.

According to the spokesman of the Foreign Trade Department of the Ministry of Commerce, the first 10 provinces and cities that have carried out the export business of used cars have initiated their projects, and the bonded maintenance of Processing and trade has also accelerated, and the export of high-quality, high-tech and high-value-added products has grown steadily. Currently, all national and local authorities have paid close attention to the implementation of the policies for stabilizing foreign trade made by the State Council, and have achieved positive results and good practices to follow. For example, the average processing time for normal tax refunds has been shortened to within 10 working days, the coverage of export credit insurance has been further expanded, and the regulatory documents for import and export supervision have been further simplified. These measures have effectively stimulated the vitality of market players and boosted the confidence of foreign trade enterprises.

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