General

The problem oriented characteristics of China's measures to stabilize foreign trade are becoming increasingly evident. The executive meeting of the State Council held on April 7th pointed out that efforts should be made to stabilize exports to developed economies and guide enterprises to deeply explore developing country markets and regional markets such as ASEAN. Previously released data showed that China's international trade import and export data slightly decreased by 0.8% year-on-year in the first two months, especially with a decrease of 2.6% for the European Union, 10.6% for the United States, and 5.7% for Japan. This needs to be taken seriously by Chinese government agencies and enterprises.

Looking at China's foreign trade situation in recent years, although ASEAN has become China's largest trading partner, the proportion of trade between China and developed economies is still relatively high. For example, in 2022, exports to the United States accounted for 16% of China's total exports. Therefore, stabilizing China's exports to developed economies is of great significance for stabilizing foreign trade.

"We need to export to developed economies from a long-term perspective. Generally speaking, developed economies have strong purchasing power and sufficient demand, which is a market deeply cultivated by Chinese foreign trade enterprises. However, in recent years, due to geopolitical turmoil, Russia-Ukraine conflict, global inflation and other factors, China's economic and trade cooperation with developed countries is facing more uncertainty." International Trade Center (ITC) Zhao Quan, trade policy adviser of the Office of Chief Economist, said that the future recovery of demand of developed economies depends not only on the political trend and progress in resolving the Russia-Ukraine conflict, but also on the effectiveness of macroeconomic policies such as reducing inflation adopted by countries.

Zhao Quan believes that the current situation will present more intense challenges for Chinese international trade export enterprises, but if Chinese enterprises can overcome difficulties and find a foothold, it will bring benefits for their future roots in developed country economies. In his view, a systematic approach is needed to stabilize exports to developed economies, which can be approached from the following aspects:

One is to better combine stabilizing foreign trade with stabilizing foreign investment. Developed economies' investment enterprises in China play an important role in China's foreign trade import and export, and stabilizing foreign investment is beneficial for stabilizing foreign trade. In recent years, under the influence of political factors, especially the US strategy of "decoupling" and "chain breaking", foreign investment in China has posed certain challenges. This requires China to continue to promote a higher level of openness, continuously optimize the business environment, respond to the demands of foreign enterprises, and enhance the confidence of foreign enterprises in China's development.

The second is to combine exploring new needs with maintaining old ones. Wang Shouwen, the representative and deputy minister of the Ministry of Commerce for international trade negotiations, stated at a press conference held by the State Council Information Office on April 4th that a questionnaire survey of 15000 enterprises that have been recycled from the Canton Fair shows that the main difficulties encountered are a decrease in orders and insufficient demand. For example, Zhao Quan mentioned that in recent years, the epidemic has to some extent changed the composition of consumer demand. With the development of technology, the demand for household robots, electric vehicles, entertainment equipment, and service trade has relatively increased, which may become a new demand for Chinese export enterprises to explore.

The third is the combination of trade and foreign investment. Encourage emerging manufacturing enterprises, especially those with certain brand influence, to layout their industrial chains in developing countries around developed economies. While meeting market demand and driving local employment, they also drive the export of intermediate goods with high technological content and added value, driving Chinese enterprises and other developing countries to better explore the international market. Especially in the current era of rising trade protectionism and turbulent international political disputes, there is a trend of nearshore and friendly restructuring of industrial and supply chains. Encouraging enterprises to better layout their supply chains globally can better help them reduce trade barrier related risks.

We also need to combine trade in services with trade in goods, forming a pattern of mutual promotion and development between trade in services and trade in goods. In particular, we need to make good use of international exhibition platforms such as the Canton Fair, China Import and Export Fair, China Service Trade Fair, and China Consumer Expo to promote economic and trade exchanges between China and foreign countries. Enterprises can invite customers to China for on-site inspections and exchanges, feel the atmosphere of China's economic recovery, and break down some prejudices against China formed by certain foreign media reports To achieve the goal of enhancing confidence and facilitating orders Zhao Quan stated that stabilizing exports to developed economies not only helps China's development, but also helps developed economies emerge from inflation. It is foreseeable that in the future, China will introduce more favorable policies in stabilizing foreign trade and foreign investment, helping international trade enterprises overcome difficulties.