September 8, 2022
BEIJING – Trade: Supportive policies set to boost vitality of firms
China’s foreign trade is expected to expand steadily in the coming months, driven by the government’s supportive policies and the resilience of its industrial chain in electromechanical industry, experts said on Wednesday.
In August, the value of China’s foreign trade in goods grew 8.6 percent year-on-year to 3.71 trillion yuan ($531.6 billion), and the figure reached 27.3 trillion yuan in the first eight months of this year, up 10.1 percent year-on-year, according to the General Administration of Customs.
Though the growth rate in August was slower compared with July’s 16.6 percent year-on-year growth, due to the high base last year and a weakening in global demand, the experts said, China’s foreign trade will be able to maintain double-digit growth in the second half of the year, and is expected to be a major driver of its economic growth this year.
“Many global orders are likely to flow back to China in the fourth quarter as infections with Omicron’s new sub-variants have soared in Vietnam, disturbing its supply chain for foreign customers, especially in labor-intensive manufacturing,” said Bai Ming, deputy director of international market research at the Chinese Academy of International Trade and Economic Cooperation in Beijing.
“And bilateral and multilateral free trade deals, such as the Regional Comprehensive Economic Partnership agreement, will be practical tools for China to put its foreign trade growth on a firmer footing,” Bai added.
The surging cost of production materials and energy prices in Europe and South Korea, as well as declining international shipping freight costs, will ensure global continued demand for Chinese products in the coming months, said Su Qingyi, a researcher at the Chinese Academy of Social Sciences’ Institute of World Economics and Politics in Beijing.
China’s trade with member states of the Association of Southeast Asian Nations — its largest trading partner — soared 14 percent on a yearly basis to 4.09 trillion yuan between January and August. In addition, its trade with the European Union rose 9.5 percent to 3.75 trillion yuan.
The total trade value between China and the United States grew 10.1 percent year-on-year to 3.35 trillion yuan. China’s foreign trade with the other 14 RCEP members rose 7.5 percent from January to August, Customs data showed.
The country’s supportive policies, such as accelerating the negotiation of free trade agreements with more countries and encouraging new trade formats including cross-border e-commerce, will further boost exports, said Ministry of Commerce spokeswoman Shu Jueting.
Exports of electromechanical products, such as computers, vehicles and smartphones, rose by 9.8 percent year-on-year to 8.75 trillion yuan between January and August, accounting for 56.5 percent of the nation’s total export value.
Zhou Maohua, an analyst at China Everbright Bank, said the double-digit foreign trade growth in the first eight months of the year reflected China’s thriving manufacturing sector and its complete supply chain.
“China’s export structure has been notably optimized, with the exports of electromechanical products proportionately increasing in foreign trade,” said Zhou.
He said the export growth of China’s labor-intensive products also demonstrates that the country’s competitiveness in this sector, which has remained cost-effective despite high inflation in many overseas markets.
China’s exports of labor-intensive products surged 14.1 percent year-on-year to 2.81 trillion yuan in the first eight months, according to Customs data.
The strong performance of China’s foreign trade will help to bolster the country’s economic growth and stabilize its job market in the second half of 2022, said Feng Yaoxiang, director of the trade and investment promotion department at the China Council for the Promotion of International Trade in Beijing.