General

In the first quarter of this year, China's international trade import and export achieved a growth of 4.8%, achieving a "stable opening". However, the situation remains complex and severe, facing many difficulties and challenges.

At the recent State Council policy briefing on promoting stable, scaled, and optimized foreign trade structure, Wang Shouwen, the representative and deputy minister of international trade negotiations at the Ministry of Commerce, stated that from the perspective of the external environment, the uncertainty of external demand remains the biggest constraint.

In April, the International Monetary Fund lowered the global economic growth rate from 2.9% to 2.8%, believing that the slowdown in developed country economies would be very significant. Recently, the foreign trade of neighboring countries has decreased significantly. For China, from October last year to February this year, international trade exports showed negative growth in US dollars. From the perspective of business entities, China's foreign trade enterprises also face some constraints and difficulties, such as inconvenient participation abroad, increasing trade risks, and increasing business pressure.

To this end, the State Council has introduced a new round of measures related to offline exhibitions, visas, flights, exchange rates, financing, cross-border e-commerce, and many other fields, providing precise support to foreign trade enterprises.

Assist enterprises in expanding the market and increasing orders

Since the beginning of this year, foreign trade enterprises have seen significant growth in promoting trade and meeting the needs of suppliers and buyers. Wang Shouwen pointed out that the Ministry of Commerce, relevant departments, and local governments have carried out a series of work to provide some support and guarantees for foreign trade enterprises, enabling them to explore international trade markets domestically or abroad and strive for orders.

Next, the Ministry of Commerce will first organize the Canton Fair and a series of other exhibitions. At this moment, the Canton Fair is ongoing, and it is very important for trade enterprises as suppliers and foreign buyers as demanders to connect with exhibitions like the Fair. Wang Shouwen said that in the first quarter, the Ministry of Commerce recorded or approved 186 various exhibitions.

The Ministry of Commerce will also issue national trade guidelines, with each country developing a trade promotion guide for key markets. At the same time, we should make good use of the trade facilitation working group mechanism under the "the Belt and Road" established with many countries to promote the solution of the difficulties encountered by Chinese enterprises in developing markets in the countries along the "the Belt and Road" and increase opportunities for enterprises.

Facilitate business personnel exchanges

Business personnel need to go abroad, or foreign guests need to come to China for supply and procurement docking. There are currently relatively few international flights and ticket prices are relatively expensive, "Wang Shouwen said." Our country's recovery rate of international flights has reached nearly 30% compared to before the epidemic, and we are still working hard to make full use of these flights

For the difficulties encountered in visa application, enterprises need to apply for a visa when going overseas, or foreign guests need to apply for a Chinese visa when coming to China. In this regard, the Ministry of Foreign Affairs and other relevant departments are promoting relevant countries to provide convenience for enterprises to apply for visas, and also to facilitate foreign enterprises to apply for visas in China. It is worth mentioning that support has been provided for the practice of replacing visas with APEC business travel cards, and virtual visa cards will be allowed to enter China on May 1st. At the same time, relevant domestic departments are further studying and optimizing remote detection measures to provide convenience for business personnel to visit China.

Accelerate the development of cross-border e-commerce

In the first quarter of this year, cross-border e-commerce continued to maintain a high-speed growth momentum. Li Xingqian, Director of the Foreign Trade Department of the Ministry of Commerce, stated that according to a report from the World Trade Organization, global B2C cross-border e-commerce will maintain a growth rate of 27% until 2026. China will develop a "cross-border e-commerce+industrial belt" around the development of cross-border e-commerce; Establish an online comprehensive service platform; Improve assessment and evaluation to promote excellence and support strength; Guide compliant operations and prevent and control risks.

Among them, in terms of compliance management, China will accelerate the introduction of cross-border e-commerce intellectual property protection guidelines to help cross-border e-commerce enterprises understand the intellectual property situation in the target market and do their homework in advance. In the field of cross-border e-commerce, it is necessary to model the protection of intellectual property rights, eliminate counterfeit and inferior products, and make Chinese cross-border e-commerce platforms and enterprises the headquarters of "true, excellent, and beautiful" products. At the same time, let cross-border e-commerce platforms and enterprises become spokespersons for fast fashion consumption, in order to attract more consumers, especially young consumers, and fully protect the legitimate rights and interests of global consumers.

Strengthening the Management of Exchange Rate Fluctuation Risks by Enterprises

Jin Zhongxia, Director of the International Department of the People's Bank of China, stated that the international trade foreign exchange market has experienced significant fluctuations in the past year, including significant and frequent interest rate hikes by the Federal Reserve. In this situation, some macroeconomic prudential tools have been comprehensively utilized, and several indicators such as the foreign exchange reserve ratio and forward foreign exchange risk reserve of financial institutions have been adjusted in a timely manner. Measures have been taken to improve the macro prudential management of cross-border financing across all channels, Strengthen guidance on market expectations. At the same time as exchange rate flexibility increases, it also guides enterprises to become more accustomed to using market-oriented methods to manage exchange rate fluctuation risks, mainly by encouraging banks to provide various hedging tools for enterprises and reducing the cost of using these tools, so that enterprises can smoothly adopt market-oriented methods to manage exchange rate fluctuation risks.

Next, the People's Bank of China will continuously improve a managed floating exchange rate system based on market supply and demand, with reference to a basket of currencies for adjustment. It will also continue to deepen the market-oriented reform of the exchange rate, enhance the flexibility of the RMB exchange rate, guide enterprises and financial institutions to establish a risk neutral mindset, comprehensively implement policies, stabilize expectations, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.

Guide financial institutions to increase support for foreign trade enterprises

Jin Zhongxia stated that the People's Bank of China has taken many measures to ensure financial support and stabilize foreign trade.

The first measure to be taken is to reduce the financing costs of the real economy. In 2022, the weighted average interest rate for Chinese corporate loans decreased by 34 basis points year-on-year, to only 4.17%, which is a relatively low level in history.

Secondly, guide financial institutions to increase their support for small and micro enterprises and private foreign trade enterprises. As of the end of 2022, the balance of inclusive small and micro loans increased by 24% year-on-year, reaching 24 trillion RMB.

Thirdly, financial institutions were guided to provide exchange rate risk management services for foreign trade enterprises, and bank fees for foreign exchange transactions related to small and medium-sized enterprises were reduced. Last year, the corporate hedging ratio increased by 2.4 percentage points compared to the previous year, reaching 24%. The ability of small and medium-sized enterprises to mitigate exchange rate fluctuations has further improved.

Fourthly, we have continuously optimized the RMB settlement environment for cross-border trade and improved the level of cross-border trade facilitation. Last year, the scale of cross-border RMB settlement in goods trade increased by 37% year-on-year, accounting for 19%, an increase of 2.2 percentage points compared to 2021.