China’s foreign trade has gradually rebounded and stabilized quarter on quarter since this year, and leading indexes constantly improve for three months, under the double pressures that some middle & high end manufacturing industries flow back to the developed countries and some labor-intensive industries are replaced by Southeast Asia nations.
The customs on Oct. 13 released the foreign trade data of September and the first three quarters. Settled in the currency of RMB, the import & export value of China’s visible trade totaled at 17.53 trillion yuan for the first three quarters, down 1.9 percent year on year. This figure for September is -2.4 percent year on year, and export trade also decreased 5.6 percent.
Export fell again in September
The import & export value totaled at 2.17 trillion yuan in September, down 2.4 percent, with -5.6 percent for export and +2.2 percent for import; trade surplus recorded at 278.35 billion yuan, narrowed 25 percent, based on customs statistics. The export kept a growth of 5.9 percent in August after a straight 5-month growth.
“Ups and downs, foreign trade is sometimes favorable and sometimes bad, which is also a new normal-status; it is still at the bottom of a ‘L-shaped’ trend”, Bai Ming, vice president of national market research institute under Ministry of Commerce, analyzed.
Export fallback in September is mainly caused by general export drop to main trade partners. Referring to export destinations, China’s export to the U.S. decreased 8.1 percent, while that to EU dropped 9.8 percent, with -10.3 percent, -10.2 percent, -7 percent and -0.8 percent respectively for that to Hong Kong, Taiwan, Japan and ASEAN. Additionally, China’s export to Russia, Brazil and India also decreased.
Growth rates of China’s export to main trade partners almost dropped without obvious base-number effect, showing that demands of external markets are weak now and export faces much pressure, data comments of online Bank of Communications research said.
“International markets have not fully recovered yet, trade conflicts recently happen more, especially in labor-intensive industries, and China’s competitiveness is gradually compressed to some Southeast Asian countries, which are all factors to cause export weakness again”, Bai also pointed out.
The market share of China’s labor-intensive products in the U.S. and Japan respectively declined 1.1 percent and 1.7 percent for the first seven months, but such figures for congeneric products of Southeast Asian countries increased 0.7 percent and 0.9 percent respectively in the same period, according to related data.
However, experts still believed that further-downtrend space is limited for export. “Although the growth rate is slow, new advantages for our foreign trade are forming; traditional labor-intensive industries have partially transferred outward, but there are some new comers integrated with industrial transformation & upgrading, which gradually achieve comprehensive competitiveness and advantages; furthermore, China has 11 free trade zones (ATZs) now, also playing a positive role; ‘the Belt and Road’ initiative also steps in project implementation period; all mentioned above will support the foreign trade”, Bai mentioned.
Policies for foreign trade and industries should work together
“Although values of import & export, export as well as import for the first three quarters still dropped year on year, it has gradually rebounded quarter on quarter”, Huang Songping, news spokesman of General Administration of Customs, said in the press conference of the State Council Information Office on Oct. 13.
China’s values of import & export, export as well as import for the first quarter fell 7.2 percent, 6.3 percent and 8.3 percent respectively, data shows. But such figures for the second quarter were -0.2 percent, 0.6 percent and -1.3 percent, with 1.1 percent, 0.4 percent and 2.1 percent for the third quarter.
The export increased year on year for the third quarter, showing that foreign trade margin stabilizes on the whole, and such trend is expected to continue, based on report from Huatai Macro Research.
Meanwhile, some new highlights also emerge. Huang said, optimizing export & import has been positively improved. For example, export of equipment manufacturing and high value-added industries are driven by enterprises’ “go-out” strategy and international capacity cooperation. Export growth in motor & power generator, medical instruments & appliances, and textile machines were 5.7 percent, 6.3 percent and 1.2 percent respectively for the first three quarters. Additionally, import of high-tech products increased 1.4 percent year on year.
Bai believed that current foreign trade has a signal of rebound and stabilization, but having not formed a trend yet. Especially, efforts should be further intensified to realize the “uptrend”, as it depends on whether fundamentals change or not.
“However, it is still hard to stop the export & import decline for a whole year based on a negative growth of 1.9 percent for the first three quarters”, Bai said frankly, as it means that a growth of around 6 percent is required for the last quarter in 2016.
Growth space of foreign trade is negatively influenced by changes in international trade situation, Huang analyzed. On one hand, developed economies incent their own manufacturing’s revival, making some middle & high end manufacturing industries flow back to these developed countries from China; and on the other hand, emerging economies with low costs for labor, land and other factors become more attractive to international companies, and speed up their pace for the rise of middle & low end manufacturing, compressing China’s market share of traditionally-advantaged products to some extent.
Policies should focus more on industries to help foreign trade survive from the said “double pressures”. It is not enough for policies to support the trade only, but also requires integrating the policies for trade and industries. At the meantime, five strategies of “Made in China 2025”, Recovering Northeast China, Yangtze River Economic Zone, “the Belt and Road” as well as Beijing-Tianjin-Hebei Integration should be combined to further attract foreign capital into China’s innovation-driven development. The ATZ strategy’s potential should be further realized, according to Bai. Sino-Korean and Sino-Australia ATZs agreements with the most intensified strength and highest class have been signed for over one year, but the ATZs’ advantages have not fully shown yet, thus, efforts should be further made to promote the development.
Translated by Jelly Yi
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