General

The relevant report of the World Trade Organization (WTO) shows that at present, the export orders of major economies in the world continue to decline, the air transport situation has not yet returned to the normal level, and the container throughput is not ideal. In 2023, the global commodity trade volume may only grow by 1%, which may be significantly lower than the 3.4% previously predicted. The Ministry of Commerce of China also pointed out that the global economic and trade situation facing China has become extremely severe, and the downward pressure on China's foreign trade exports has significantly increased. Overall, the main difficulties faced by China's foreign trade exports have shifted from supply chain obstruction and insufficient contractual capacity last year to the current problems of weak external demand, decreased orders, and insufficient supply capacity. This indicates that in the future, China's foreign trade export situation will remain severe and will have a negative impact on China's economic and social development.

The main reasons for the current severe situation of China's foreign trade exports

First, hegemonic countries cracked down on China and listed several Chinese entity enterprises in the "Entity List" of export control, especially in the high-tech industry, which objectively led to a sharp decline in China's exports of related products; Some countries mistakenly include China as a 'country of distrust' and restrict the import of our export goods.

Second, the Russia-Ukraine conflict has seriously affected the global Economic security, leading to increased uncertainty in the external environment, continued high global inflation, weakening growth momentum of the world economy and trade, and an overall decline in demand in the international trade market.

Third, because of the prevalence of COVID-19 in China in the past three years, the comprehensive cost of China's foreign trade exports has risen and the profits have declined significantly, which has reduced the global competitiveness of China's foreign trade exports.

Fourthly, in the context of a comprehensive global economic recession, many countries have adopted strict restrictive measures on imported products in order to avoid dumping foreign products on their own countries.

Fifthly, some countries have competitors to replace some of China's export products with weak core competitiveness, which has put some foreign trade export enterprises in a more difficult situation. A considerable number of product exports are difficult to recover in the short term.

Sixth, countries around the world have launched differentiated prevention and control policies against the COVID-19, and many ports have adopted closed management without early warning for a long time, which has made it impossible for China's foreign trade export products to ship out of the port and transport or arrange unloading in time after arriving at the port, thus losing a large number of export orders.

Seventh, due to various reasons such as the epidemic, many private foreign trade export enterprises in China have encountered operational difficulties, and these private enterprises are an important force in China's export foreign trade army, which has a significant impact on China's export situation.

Eighth, at present, the world is gradually beginning to bear the serious consequences of the Silicon Valley Bank and Credit Suisse events. Although in the short term, the impact of the events of Silicon Valley Bank and Credit Suisse on China's financial market is limited and controllable, this event will undermine the stability and security of the global financial market, which will lead to the concentration of crises in Capital adequacy ratio, Liquidity risk, credit risk and other aspects of the global financial institutions, resulting in the negative impact of financial products and financing policies matching export trade.

An important magic weapon for breaking through the current predicament

New offshore international trade refers to the trade between Chinese residents and non residents, where the goods involved in the exchange do not enter or exit China's frontline customs or are not included in China's customs statistics. It includes but is not limited to offshore resale, global procurement, overseas processing, and overseas procurement of goods for contracted projects. New offshore international trade is a component of offshore trade. While actively restoring foreign trade exports of goods, China also needs to further expand new offshore international trade to make up for the shortcomings in foreign trade of goods.

The author suggests adopting the following measures: firstly, vigorously developing new offshore international trade. We should look for new business directions and opportunities through previous resale and Re-exportation.

The second is to explore new models for expanding service trade, strengthen support and expansion for digital trade, Silk Road e-commerce, and other businesses.

The third is to strive to settle the offshore trade payment settlement brought by the projects involved in the "the Belt and Road" initiative in our country in our financial institutions. All provinces and cities in China should take the opportunity of the "the Belt and Road" project undertaken by the region to provide supporting services of offshore finance for its investment and financing business, and provide supporting services for the derived international procurement business through offshore trade, thus driving the rapid development of offshore trade in the region.

The fourth is to strive to transfer the payment and settlement services of some Chinese enterprises engaged in offshore trade business through overseas platforms to domestic financial institutions for processing.

The fifth is to derive offshore trade from the foreign investment and financing business of relevant provinces and cities in China. Because investment and financing are opportunities for offshore trade, the development of offshore trade should pay more attention to fully integrating local external investment and financing businesses.

Sixth, we will vigorously develop offshore trade business related to cross-border e-commerce. Cross border e-commerce is a new type of commercial entity that has emerged in recent years. Its characteristic is that although the scale of individual assets is not large, the transaction settlement volume generated by the business activities of these enterprises is very large. Especially the settlement volume generated by cross-border e-commerce distribution centers, overseas warehouses, and other businesses is even larger.

Seven is to make good use of RCEP opportunities. The cumulative rules of origin in RCEP allow products with multiple division of labor to be labeled as their origin according to the rules, which effectively avoids the restrictions imposed by countries such as the United States and Europe on Chinese products. This is because under the principle of cumulative origin, the division of labor in the industrial chain of Chinese export enterprises must be segmented within RCEP countries. Chinese enterprises inevitably need to invest in RCEP countries and control and manage the entire RCEP industrial chain domestically, thus gathering a huge scale of offshore trade. Moreover, cross-border investment, financing, and offshore trade carried out through RCEP can generate a large amount of service trade, which is a huge offshore trade business opportunity for relevant provinces and cities in China.

Eighth, China's regulatory authorities need to collect complete and accurate data on offshore trade. The data of offshore trade should not only include customs statistics, but also include statistical data of new offshore international trade regularly submitted by Chinese commercial banks, offshore trade settlement data processed by four offshore banks, as well as offshore trade data processed by overseas banks involving Chinese resident enterprises and non residents.

Ninth, China should attach importance to the key role of free trade pilot zones in stabilizing foreign trade exports. As the name suggests, the core role of China's pilot free trade zones is "free trade"; The establishment of comprehensive bonded zones and free trade pilot zones in China is an important platform for cross-border investment and financing. Therefore, the pilot free trade zone should not only carry out more "free trade" businesses, but also bring more "free trade" businesses through cross-border investment and financing.

Ten is to fully solve the problem of blockages in the development of new offshore international trade. To carry out new offshore international trade, the following three important bottleneck issues need to be addressed: 1. How can enterprises ensure the authenticity and security of conducting new offshore international trade business; 2. How financial institutions ensure compliance issues in handling new offshore international trade payment settlement "anti money laundering, anti tax avoidance, and anti-dumping"; 3. The biggest headache for regulatory authorities is illegal arbitrage and risk control. The most effective way to solve these three major problems is to build a new type of offshore international trade service platform that combines information verification, security compliance, anti money laundering, anti-terrorism financing, and anti tax evasion. This requires China to establish a national level information verification platform for new offshore international trade.

Pay attention to the common development of offshore trade and offshore finance

To carry out offshore trade well in our country, we must pay attention to closely relying on offshore finance; To carry out offshore finance well, it also requires a large number of institutions and enterprises engaged in offshore trade as support. Carrying out offshore financial business in relevant innovative regions of China can quickly expand the scale of offshore financial business in relevant regions; Offshore finance can directly provide convenient services for enterprises in relevant regions to carry out cross-border investment and financing business, and help enterprises optimize the allocation of funds globally; Offshore finance can also effectively reduce the operating costs of enterprises, facilitate the centralized management of domestic and foreign funds by enterprises, improve the use efficiency of funds, effectively control the operational risks of enterprises, facilitate enterprises to handle the settlement and financing of cross-border trade business, and promote positive Financial innovation in the pilot free trade zone, These advantages can enable China's relevant innovation regions to attract a large number of offshore trade and cross-border financing customers to settle and carry out business activities in the short term.

In the process of carrying out offshore trade in relevant innovative regions of China, the current focus should be on the supporting services of offshore finance, and at the same time, it is necessary to cultivate a commercial and legal environment for conducting offshore finance and offshore trade business. The most crucial thing here is that conducting offshore finance well can enhance the confidence of more institutions and enterprises in China.