China is facing challenges in its foreign trade sector due to subdued external demand and rising protectionism, exacerbated by global economic uncertainties. In response to these issues, experts and government officials anticipate increased policy support to stabilize exports and measures to stimulate domestic consumption and investment to accelerate the country’s economic recovery.
Recent data from the General Administration of Customs revealed that China’s foreign trade from January to September experienced a slight year-on-year decrease of 0.2 percent, amounting to 30.8 trillion yuan ($4.13 trillion). During this period, exports showed marginal growth, increasing by 0.6 percent year-on-year to reach 17.6 trillion yuan, while imports declined by 1.2 percent compared to the previous year, totaling 13.2 trillion yuan.
Lyu Daliang, spokesperson for the General Administration of Customs, emphasized their commitment to closely monitoring policy implementation while being responsive to exporters and local governments. The organization aims to facilitate foreign trade enterprises’ access to emerging markets and reduce Customs clearance times for exporters. Furthermore, they intend to support cross-border e-commerce growth and enhance China’s business relations with major trading partners.
The Ministry of Commerce has also taken steps to promote cross-border business trips and foster trade cooperation in the field of new energy vehicles. Experts believe that exporting innovative, consumption-driven, and technology-intensive products can aid China in diversifying its economy and reducing its reliance on specific industries and markets, thereby increasing resilience against economic uncertainties.
One of the most significant challenges for China’s exporters is the persistently weak overseas demand throughout the year. However, there are indications of improvement. Zheng Houcheng, Chief Macroeconomist at Yingda Securities, forecasts an uptick in export growth in the current quarter, albeit marginal. This optimism is somewhat tempered by the increased likelihood of interest rate hikes in the United States, which could offset the upward trend.
While demand from the United States and Europe remains somewhat subdued compared to pre-pandemic levels, there are modest signs of recovery in China-US trade figures. Justin Yifu Lin, Dean of the Institute of New Structural Economics at Peking University, emphasizes that exports remain a vital driver of the Chinese economy. Sluggish exports in recent months have reduced investment opportunities for foreign-trade enterprises, negatively impacting domestic job creation and consumption.
Data released by the National Bureau of Statistics indicates unchanged inflation levels and tepid industrial activity in China. To address these challenges, experts suggest that the Chinese government should adopt a more proactive fiscal policy and an expansionary monetary policy. These measures would generate more investment demand, benefit the private sector, boost confidence for investment, create jobs, and stimulate consumer spending.
Zhou Maohua, an analyst at China Everbright Bank, points out that China’s foreign trade sector exhibits strong resilience, while the domestic economic recovery is steadily gaining momentum. Despite expectations of only slight global demand expansion, China is anticipated to experience further growth in both exports and imports in the coming months.
China recognizes the need for robust policy support to stabilize its exports and drive domestic consumption and investment to boost economic recovery. As the global economic landscape remains uncertain, these measures are essential to ensure the country’s continued growth in foreign trade. The prospects of a brighter foreign trade future also hold promise for enterprises involved in initiatives like the Belt and Road Initiative, adding to the optimism surrounding China’s trade outlook.