General

Since the beginning of this year, the growth rate of China's foreign trade has continued to slow down due to factors such as weakened external demand and a high base in the early stage. However, with the gradual implementation and effectiveness of policies to promote stability and quality in the early stage, China's foreign trade has shown a trend of marginal improvement and continuous structural optimization, demonstrating strong resilience and competitive advantages in international trade exports.

Increased external environmental challenges

Since the second half of 2022, the growth rate of China's international trade imports and exports has continued to decline. In addition to being affected by a high base, it has also been affected by factors such as weak global demand under tightening policies, increased supply shocks under geopolitical risks, and industrial relocation caused by some countries' strong promotion of "decoupling and chain breaking".

The market predicts that the global economy will slow down or stagnate in 2023, leading to low growth in global international trade. The report "Global Trade Outlook and Statistics" released by the World Trade Organization on April 5th shows that global commodity trade volume will increase by 1.7% in 2023, lower than the average growth rate of 2.6% in the past 12 years. According to the "Barometer of Goods Trade" released by the World Trade Organization in early March, the global goods trade prosperity index is 92.2, below the benchmark point of 100, and the export order index is 97.4, slightly below the trend level. The container transportation index, air freight index, electronic component index, and raw material index are all below the trend level and showing a downward trend. Meanwhile, in March, the purchasing managers' index (PMI) of major economic systems such as the United States, the eurozone, Japan, and the UK, although rebounded, remained below the boom and bust line.

In addition, the Federal Reserve's rate hike has triggered a global rate hike, and the tightening policies of major economies have led to a corresponding decline in global demand. The exposure of sovereign debt risks in some countries and the increase in uncertainty caused by the decline in financial asset prices will have a negative impact on global trade. The continuous contraction of external demand will have a certain impact on China's imports and exports, manifested in a decrease in new export orders.

Geopolitical conflicts have also led to supply instability. At present, the Russia-Ukraine conflict is still fermenting, resulting in high prices of bulk commodities, especially energy, grain and metals, and an unstable increase in global commodity supply. Some countries seeking protectionism will pose a new impact on global trade. In addition, some countries are pushing for "decoupling and chain breaking", and the supply chain of key products and raw materials such as semiconductors is facing "reshaping". In this context, the localization and regionalization of the industrial chain are accelerating, leading to a partial loss of export orders.

Obvious export competitive advantage

Although China's foreign trade imports and exports are under short-term pressure, the long-term accumulated competitiveness will not disappear. With the accelerated recovery of China's economy, the utilization rate of production capacity will pass the "ramp up period" and the marginal improvement of foreign trade. Since February, the volume of export containers has continued to grow, and foreign trade imports and exports have significantly stabilized, demonstrating strong resilience.

The competitive advantage of export products remains significant. In recent years, China has placed greater emphasis on the development of the real economy and remains a global manufacturing center. It has a complete industrial system and complete supporting production capacity, and has a strong ability to adjust according to demand, which can quickly adapt to changes in external demand. In March, the production activity of China's manufacturing industry continued to expand, with an expected index of 55.5% for production and business activities, which continued to be in a high economic range. The PMI production index and new order index were 54.6% and 53.6%, respectively, which are still at a relatively high level of recent prosperity.

At present, some new products have strong export competitiveness, such as electric vehicles, lithium batteries, solar cells, and other export growth rates are fast, with a total export growth of about 60%, fully reflecting China's strong production and manufacturing capacity for high-quality and affordable products. Exports will effectively lower global prices of manufactured goods, helping major economies curb high domestic inflation.

The new forms of trade and new driving forces are gradually strengthening. During the epidemic period, Chinese foreign trade enterprises have found many new ways to expand their markets. The rapid development of cross-border e-commerce, overseas warehouses, digital trade and other businesses has strongly supported the stability and quality improvement of foreign trade imports and exports. After the optimization and adjustment of epidemic prevention and control measures, China is still utilizing the experience of stabilizing foreign trade accumulated during the epidemic to vigorously expand diversified international markets and obtain more export orders. In the first two months of this year, the proportion of enterprises whose new export orders increased continuously, cross-border e-commerce import and export increased by 15.8% year on year, import and export to countries along the "the Belt and Road" increased by 10.2%, and total import and export to other members of RCEP (Regional Comprehensive Economic Partnership Agreement) increased by more than 3%.

The policy of stabilizing foreign trade and foreign investment continues to be effective. China adheres to the basic national policy of opening up to the outside world, and has introduced a series of policies and measures to stabilize foreign trade and foreign investment in accordance with local conditions and keeping pace with the times. These measures include actively building open cooperation platforms such as free trade pilot zones, attracting and utilizing foreign investment with greater efforts, facilitating cross-border logistics through smooth import and export logistics, optimizing the port business environment, providing enterprises with one-stop customs clearance services, and helping enterprises make full use of tariff preferences in free trade agreements such as RCEP, Fully promote foreign trade to promote stability and improve quality, and maintain diversified and stable international economic and trade relations.

Expanding Opening up, Promoting Stability and Improving Quality

In the face of increasing external uncertainty, in order to further enhance the resilience of foreign trade, it is still necessary to increase high-level opening up to the outside world, make every effort to promote stability and quality of foreign trade, focus on overcoming bottlenecks and difficulties, smooth domestic and international economic circulation, accelerate the construction of a trade powerhouse, and continue to play a supportive role in economic growth through foreign trade.

Create a more open and secure economic environment. Continue to promote the overall improvement of the domestic economy, continue to expand market access, implement national treatment for foreign-funded enterprises, expand and optimize the layout of regional open spaces, encourage regions to expand openness based on comparative advantages, create an open, stable, and safe economic environment, focus on attracting foreign investors, traders, and others to invest and develop, cultivate more foreign trade entities, and effectively ensure the security and stability of the industrial chain supply chain, To drive high-quality development of international trade.

Create a more free and fair international environment. We will actively align with high standard international economic and trade rules, steadily expand institutional openness in terms of rules, regulations, management, and standards, and accelerate the formation of an institutional system and regulatory model that is in line with internationally accepted rules. We will strengthen coordination of international economic policies and avoid the negative Spillover effect of radical policy adjustments in some countries on China. Accelerate the expansion of the global network of high standard free trade zones, solidly promote the high-quality development of the "the Belt and Road" international trade, help enterprises make full use of bilateral and multilateral free trade agreements, reduce the cost of import and export links, and expand the broad market.

Create a more smooth and convenient policy environment. Implement a series of policies to stabilize foreign trade and foreign investment, maintain the continuity and stability of policies, guide market expectations to strengthen, use technological means to smooth cross-border logistics supply chains, accelerate the construction of a "single window" for international trade, provide "one-stop" services for customs clearance for foreign trade enterprises, support foreign trade enterprises in promoting production, ensuring performance, seizing orders, improving the speed of goods clearance and production delivery capacity, and stabilize and improve processing trade, Ensure the export of advantageous products and promote stable scale and optimized structure of foreign trade.

Create a more relaxed and active innovation environment. Encourage local innovation in trade systems, actively develop new formats and models such as cross-border e-commerce, market procurement and trade, bonded maintenance, and overseas warehouses, support independent brands to join forces and go overseas, provide convenience such as technical exchange and overseas exhibitions, solve the problem of "difficult international certification", expand diversified market sales channels, use digital technology means, develop digital trade, and promote trade digitization, Improve a comprehensive and multi-level cross-border trade network.

Create a more attractive consumption environment. Give full play to the outstanding advantages of the super large market, share the opportunity of unifying the large market with all countries, support enterprises to make full use of open platform and trade rules such as the Canton Fair, the China International Fair for Trade Promotion, the China International Consumer Fair and the tax exemption on outlying islands, actively expand the import of high-quality products and services, and promote the export linkage development of competitive products with high-quality imports.