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China’s Foreign Trade Continues its Upward Momentum

Cargo Imports and Exports in 2017H1 Grow Fastest YoY since H2 of 2011

Submit Time:04-08-2017 | Zoom In | Zoom Out

Author:Du Haitao | Source:People’s Daily

Abstract:

  According to the customs statistics, China’s gross value of cargo imports and exports stood at RMB13.14 trillion in the first half of 2017, up 19.6% over the same period of 2016. Among it, the value of exports reported RMB7.21 trillion, up 15% and that of imports posted RMB5.93 trillion, up 25.7%, with a trade surplus of RMB1.28 trillion, narrowing down by 17.7%.  

  “In the first half of the year, China’s foreign trade continued its upward momentum that appeared in the second half of last year. Its year-on-year growth rate of the first half of the year set a new high since the second half of 2011. Thus China has seen its foreign trade growing in a more coordinated fashion,” said Huang Songping, News Spokesman of the General Administration of Customs of China on the press conference held by the State Council Information Office on the morning of July 13, 2017. Of these, the imports and exports grew by 21.6% in the first quarter of the year and increased by 17.9% in the second quarter. At present, China’s trade is getting better in terms of structure, quality and benefit, giving rise to more new engines for growth. The customs will make concrete efforts to implement the policies and measures in favor of stabilizing the growth of foreign trade and maintaining the continuously upward trend.  

  Four factors contribute to the turnaround of foreign trade in China.  

  As Mr. Huang noted, the global economy made a moderate recovery in the first half of 2017 and the Chinese economy got better amid stability over the same period of time, which proved to the outcome of the four factors—overseas demand pickup, economic recovery, price rise, and policy effect.  

  The rising overseas demand drove up the export volume, contributing greatly to the increase of the gross export value. The World Bank has recently forecast that global growth would strengthen to 2.7% this year from 2.4% last year. At the same time, IMF also raised the forecast for the global economic growth this year, compared to the year beginning. The global economy continued its recovery and the international market presented better demand than before. Thanks to the two factors, China drove up the export volume by 8.9%.  

  The domestic economy performed stably and positively, driving the continuous increase in imports. In the first half of this year, the Chinese economy continued getting better amid stability. In June, the manufacturing PMI reported 51.7, which had remained in the range of prosperity for 11 consecutive months. The stably upward performance of the domestic economy stimulated the increase in import demand. In the first half of the year, China saw its gross imports increasing by 11.6%.  

  The rises in commodity prices contributed to the import and export growth. In the first half of the year, affected by the rising commodity prices in the international community, China saw the average imported price of iron ore, crude oil, copper, and coal by 55%, 47.9%, 29.5% and 86.3%, respectively, thus driving up the overall import price by 12.7% nationwide. At the same time, the price pickup was transmitted to export through domestic production, sending the export price higher as much as 5.6%.  

  Besides, as various policies and measures designed to stabilize foreign trade growth continued to produce results, they provided a much-needed catalyst for the imports and exports bottoming out and going up in the first half of the year.  

  New highlights emerged while foreign trade improved in terms of structure, quality and efficiency.  

  In the first half of the year, China’s imports and exports expanded in scale and also demonstrated some new changes and features which could be felt in structure, quality and efficiency, as analyzed by Huang Songping.  

  Trade structure kept improving. Firstly, trading mode became more reasonable. General trade increased by 20.5% and accounted for 56.7% of China’s total value for foreign trade, up 0.4 percentage point over the same period of previous year. Secondly, import and export markets tended to be more diversified. In the first half of the year, China’s exports to such traditional markets as European countries, North American countries, and Japan went up by 18.9%, and that number for a host of countries along the Belt and Road stood at 33.1%, 14.5%, 24.6% and 15.5%, respectively. Thirdly, endogenous power grew much stronger. Private companies in China had their imports and exports grow by 20.6% and make up 38.2% of the country’s gross total of foreign trade, up 0.3 percentage point over the same period of last year.  

  Progresses were made in importing and exporting quality goods. In the first half of the year, China saw the exports of seven categories of traditional labor-intensive products like textile and apparel up by 12.9%, maintaining its considerable competitiveness in this regard. As the structural reform on supply front pushed forward and a series of tax and fee reduction policies went into effect, companies did better in independent innovation, mid-and-high end manufacturing companies could provide more support for economy, and some electromechanical products and equipment manufacturing products with high value-added maintained a sound momentum for export growth. Of these, the exports of automobiles, ships, electric motors and engines, medical devices and instruments, and drones grew by 32.5%, 25.1%, 6.5%, 12.7% and 93.4%, respectively. In the meantime, the policies for optimizing structure and expanding import started to produce effects, making the imports of resources like energy increase stably.  

  As Huang Songping pointed out, China will work hard to forge new competitive edges in foreign trade whereby technology, brand, quality and service come at the core, keep improving the quality and efficiency of foreign trade, and develop foreign trade in a sustained, healthy manner.  

  The imports and exports are in a position to maintain a sound momentum in the second half of the year.  

  In the opinion of Huang, China’s imports and exports are expected to continue its stably upward momentum in the second half of the year. As the foreign trade kept improving its structure, imports and exports would maintain its positive growth. Foreign trade faces quite a few favorable conditions:  

  The world economy is recovering slowly amid in-depth adjustment. As the World Bank forecasted, the developed economies will quicken their growth rate to 1.9% and that number for emerging markets and developing economies will reach 4.1% in 2017. The world trade will see its growth trade up to 4% in 2017 from 2.5% in 2016. The composite leading indicators the Organization for Economic Co-operation and Development released recently also indicated that OECD countries would demonstrate a momentum for stable growth in the upcoming 6-9 months. The pickup of the international market will do good to China’s exports.  

  China’s export leading indicators continued getting better. In June, the indictor reported 41.5, up 0.4 over last month. It had remained stably upward for eight consecutive months, projecting that China’s export would continue its rising trend in the third quarter of the year.  

  Foreign trade kept gathering more new engines for further growth. Private companies had their import and export growth rates outperform the general level. As trade commodities came in a constantly improved structure, some electromechanical products with high value-added saw their export growing fast and the central and western regions of China gathered pace in increasing their foreign trade.  

  The market projected a vast potential for diversified growth. In the first half of the year, China’s imports and exports with the countries along the “Belt and Road” initiative went up by 23.4%, and that number with the Latin American countries and the African countries stood at 28.4% and 28.3%, respectively. On the whole, the emerging markets have great potential to be unlocked.  

  As Huang Songping added, China’s foreign trade will be also confronted with some adverse factors in the second half of the year. Instability and uncertainty still can be felt in the international market, the import and export growth rate will be affected by the rising base number, and the competition will become fiercer in the international market, for example. But taken together, China’s foreign trade will maintain the stably upward fundamental. If there is no major risk event, it is in a position to continue the momentum for picking up through continuous efforts.  

    

  

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