General

In 2022, global trade will face challenges due to the intensification of international turbulence, the intertwined cycle of high inflation and interest rate hikes in Europe and the United States, and the repeated COVID-19. In the face of a complex and severe external environment, China's international trade exports still exhibit strong resilience. According to the "2022 Export Trade (B2B) Index Report of Small, Medium, and Micro Enterprises" jointly released by the Commerce Industry Committee of the China Council for the Promotion of International Trade and XTransfer, the overall collection volume of small, medium, and micro foreign trade enterprises in China in 2022 increased compared to the previous year. With the continuous release of the dividend from the RCEP policy, the trade promotion effect of the agreement on China's small, medium, and micro foreign trade enterprises is rapidly emerging, and the competitiveness of China's small, medium, and micro foreign trade enterprises is also continuously increasing.

The above report includes three parts: the 2022 China International Trade Export Leading Index (hereinafter referred to as the Leading Index), the 2022 China Small and Micro Foreign Trade Enterprise Competitiveness Index (hereinafter referred to as the Competitiveness Index), and the 2022 China Small and Micro Foreign Trade Enterprise Export RCEP Regional Activity Index (hereinafter referred to as the RCEP Regional Activity Index).

The report shows that in the first nine months of 2022, the leading index achieved overall growth compared to the previous year. With the intertwined cycles of high inflation and interest rate hikes in major trading partners such as Europe and the United States, overseas demand continues to be sluggish. After October, the leading index experienced its first quarterly year-on-year decline since mid-2020. However, with the arrival of the peak foreign trade season, the leading index also rebounded in the last two months of 2022.

Against this background, the export competitiveness of China's small, medium-sized, and micro international trading enterprises as a whole remains growing. According to the data released in the report, the competitiveness index achieved a year-on-year increase throughout the year.

The report shows that from March to April last year, although frequent outbreaks of domestic epidemics caused temporary pressure on logistics and warehousing, container transportation, and port transportation in key foreign trade cities, they did not have a significant impact on the competitiveness index during the same period. Since then, with the joint action of multiple factors such as the further recovery of the industrial chain supply chain and the acceleration of logistics congestion, the competitiveness index has risen rapidly and reached the highest point in the first half of the year in June.

As the transportation costs and other issues that have plagued small and medium-sized international trading enterprises since the outbreak have been greatly alleviated, the operational efficiency of enterprises has continued to improve, and the competitiveness index reached the highest point for the whole year in September. In October, the local COVID-19 epidemic in China rebounded, significantly affecting the operation efficiency of the supply chain. The average delivery time of small, medium-sized and micro foreign trade enterprises rose from about 30 days in the past to 39 days. In addition, due to factors such as the increased volatility of the RMB exchange rate against the US dollar and the rapid adjustment of the short-term exchange rate, the competitiveness index fell in the current month, but still higher than the same period last year. In December, the proportion of advance payments for orders of small and medium-sized foreign trade enterprises remained high. The proportion of orders received in the first installment increased from 77% in October to 91% in December, and the competitiveness index rebounded in that month.

The report points out that the two-way fluctuations in the exchange rate of the RMB against the US dollar in 2022 have added uncertainty to the global development of Chinese small and medium-sized foreign trade enterprises. However, it is worth noting that there are also many small, medium-sized, and micro foreign trade enterprises that have arranged in advance and actively reduced their own operational risks. On the one hand, these enterprises actively enhance their awareness of exchange rate risk management, and achieve scientific risk avoidance by setting the validity period of quotations, adding hedging clauses and exchange rate risk sharing clauses in contracts, and using financial instruments (such as foreign exchange lock) in a reasonable manner; On the other hand, it is also actively deepening the "risk neutral" concept, scientifically managing exchange rate risks, and incorporating exchange rate fluctuations into daily financial decisions.

In addition, there are also many small, medium-sized, and micro foreign trade enterprises that follow the RCEP policy dividend and actively layout relevant markets. From the perspective of annual data, the overall RCEP regional activity index is higher than that of the same period last year. "The steady growth of foreign trade and the continued diversification of the 'circle of friends' of trade are important reasons for not rejecting the flow of crowds. In 2022, China's small and medium-sized foreign trade enterprises achieved growth in their international trade exports to all trading partners in the RCEP region, which not only reflects China's foreign trade resilience, but also creates greater development space for the future," the report said.