Recovery in imports and exports will become important support for the economic growth for the whole year.
General Administration of Customs (GAC) released interim report on China’s foreign trade for the first half of this year. According to statistics, China’s imports and exports came at 13.14 trillion yuan in the first six months of 2017, an increase of 19.6 percent. Specifically, exports rose by 15.0 percent to 7.21 trillion yuan and imports surged by 25.7 percent to 5.93 trillion yuan, leading to surplus down by 17.7 percent to 1.28 trillion yuan.
Seen from the above data, China’s foreign trade recovered significantly driven by improvement in domestic and overseas demand and contribution of new growth driver. It not only continued the good momentum since the second half of last year, but also recorded the highest semi-annual growth since the second half of 2011.
Looking into the second half of this year, the growth in imports and exports may slower than that in the first half but is expected to keep recovering on the whole. There’s great chance that China’s foreign trade will achieve positive growth this year for the first time in three years, and recovery in foreign trade will back up the economic growth for the whole year.
Over last three years, China’s foreign trade suffered the “coldest winter” in 2015. In the year of 2015, the domestic demand was sluggish, which was rare and even worse than external demand in 2009, and prices of bulk commodities slumped a lot for long time, causing the growth rate of foreign trade to dive remarkably from 2.3 percent in 2014 to -7 percent. Although China’s imports and exports maintained negative growth in 2016, the decline with 0.9 percent has narrowed greatly. Growth of imports turned from negative to positive in 2016 and got stable quarter by quarter. Both imports and exports gained positive growth in the fourth quarter of last year.
“In the first six months of this year, China’s imports and exports continued the momentum with stable growth since the second half of last year.” GAC’s news spokesman Huang Songping indicated that the major reason for the increase in foreign trade in the first half of this year is that the recovering external demand pushed up exports and made remarkable contribution to gross export value. In addition, domestic economy showed stable performance, boosting the exports. The rising prices of bulk commodities stimulated imports and exports to hike. A slew of policies stabilizing growth of foreign trade continued to take effect, which also played an important role in facilitating foreign trade in the first half. “The rising demand and prices, policies, and low comparison base boosted China’s foreign trade to keep picking up during January and June.”
Noticeably, in the first six months, China’s foreign trade not only grew in size but also saw new changes and highlights in optimization of structure and improvement in quality. “In the first half of this year, China’s imports and exports achieved rapid growth, structure was further optimized, and the momentum with good performance was consolidated further, making important contribution to national economy and social development,” said officials from Ministry of Commerce.
Regarding the second half of this year, industry insiders pointed out that there will be still many uncertainties including trade conflict. On the other hand, world economy is gradually recovering from in-depth adjustment. Structure and quality of China’s foreign trade is optimized and improved continuously. Therefore, fundamentals for foreign trade to recover didn’t change.
According to statistics from GAC, China’s export leading index maintained good. It registered 41.5 in 6 months, up by 0.4 from May. It climbed stably for eight consecutive months, indicating that China’s exports will keep the good momentum in the third quarter.
The industry forecasted that the growth in imports and exports may slower than that in the first half but is expected to keep recovering on the whole and stay positive.
Lian Ping, chief economist with Bank of Communications, pointed out that although trade protectionism and trade conflict are still challenging, demand in international market may not be stable. Therefore, China’s exports will still encounter potential worry and may see slower growth. But they will be much better than those in last two years. The recovering exports will become one highlight. It is difficult for prices of bulk commodities to keep rising. The influence of price on imports will weaken and decreasing investment will impact demand for imports. Thus, growth of imports is likely to fall below 10 percent. Meanwhile, trade surplus dropped from a year earlier but did not influence trade’s contribution to economic growth. The recovery in imports and exports will become important support for the economic growth for the whole year.
Translated by Vanessa Chen
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