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China’s Foreign Trade Situation Generally Good in the First Half of the Year

Amount of Foreign Funds Used Basically Stable, Overseas Investment More Rational

Submit Time:11-09-2017 | Zoom In | Zoom Out

Author: | Source:People’s Daily (August 1, 2017)

Abstract:

On July 31, the State Council Information Office held a press conference. Vice Minister of Commerce Qian Keming and Vice President of the Development Research Center of the State Council Long Guoqiang introduced China’s foreign trade situation in the first half of the year. 

China’s foreign trade situation was generally good in the first half of this year, with the total imports and exports reaching 13.14 trillion yuan, 19.6% higher than the same period last year. The trend of decline in the past two years has been reversed. Exports and imports increased by 15% and 25.7% over the same period last year respectively. 

Apart from international markets’ recovery and the relatively low base of last year, Qian Keming said that the recovery of foreign trade also resulted from the further manifestation of policy effect. Since 2013, 16 policy documents on promoting foreign trade have been released successively, including documents on strengthening policy support, alleviating enterprises’ burdens and raising the trade facilitation level. 

In the first half of the year, the total amount of foreign funds used remains basically stable at 441.5 billion yuan. Meanwhile, the structure was further improved. The foreign funds used by the high-tech manufacturing sector and the high-tech service sector increased by 11% and 20% respectively. 

The overall investment environment kept improving. In April, seven new free trade zones including Liaoning were established, and the total number of free trade zones reached 11, bringing about the open situation of all-directional institutional innovation in the eastern, central and western regions. In June, the 2017 negative list for foreign investment access in free trade zones was printed and distributed, abolishing 27 restrictive measures. 

Foreign investors were more confident of their development in China. Most foreign enterprises operated well in China and were fully confident of investment. In July, AmCham Shanghai released the 2017 China Business Report, showing that 77% of the American enterprises interviewed realized profit in China in 2016, six percentage points higher than 2015. 

Last year, the problem of some enterprises’ irrational foreign investment was quite prominent. Therefore, the Ministry of Commerce and the relevant departments carried out authenticity and compliance review, guiding enterprises to enhance risk prevention consciousness in overseas investment and promoting healthy and standardized development of foreign investment. In the first half of the year, China’s outbound direct investment amounted to 331.1 trillion yuan, 42.9% less. Irrational overseas investment was effectively curbed. 

China’s overseas investment in countries along the Belt and Road slid just 3.6%, lower than the overall drop in overseas investment. Enterprises paid more attention to physical investment, so the decline of investment in overseas manufacturing industries was smaller compared to investment in the property, culture, sports and entertainment sectors. A number of merger and acquisition projects were implemented successfully, especially big merger and acquisition projects. 

As to the decline in overseas investment in the first half of the year, Long Guoqiang said that short-term fluctuation in a country’s overseas investment is normal and should be treated with presence of mind. 

The Chinese government’s proper management, standardization and guidance of cross-border investment are quite necessary. Macroscopically, all countries should avoid “large-scale” cross-border capital flow. For a large country like China, maintaining financial stability and avoiding financial risks is vitally important. Microscopically, Chinese enterprises with a short history of overseas investment, insufficient experience and insufficient talents have learned many lessons from overseas investment in the past few years. The government should properly remind and guide these enterprises to help them more comprehensively evaluate and avoid risks in overseas investment. 

Qian Keming said the Chinese government encourages Chinese enterprises with strength and conditions to “go out”. This policy has not changed and will not change. In the future, China will continue to promote overseas investment facilitation, raise the service level, strengthen operational and post-operational oversight and guide healthy and orderly development of overseas investment. 


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