The Decline of Imports Narrowed
China’s foreign trade in the first two months of 2016
According to Customs figures, China’s total import and export in the first two months of 2016 reached 3.31 trillion yuan, down 12.6% year on year (the same below). In terms of the U.S. dollar, the total import and export reached US$510.73 billion, down 17.4%. In February alone, the total import and export was US$1.43 trillion, down 15.7%. Among which, the exports was 0.82 trillion yuan, down 20.6%; the imports was 0.61 trillion yuan, down 8%; trade surplus reached 209.5 billion yuan, down 43.3%. In terms of the U.S. dollar, the total import and export of February was US$219.7 billion, down 20.8%.The main characteristics of foreign trade are as follows:
1. Exports dropped a lot, while the decline of imports narrowed. In February, the growth of China’s exports declined substantially, which was not only caused by the downturn of external demand, but also related to the factor of high base over the same period last year. This January, the published data of the imports from 35 economies (accounted for 70% of global imports) fell 13.9%. Besides, China’s exports in February of 2015 reached 1035.22 billion yuan, the highest number since 2009, forming a larger base. The superposition of multiple factors created this kind of situation — the decreasing amplitude of exports expanded by 13.9 percentage points compared to last month. Dragged down by the commodity prices, the negative growth of imports continued, but narrowed 6.7 percentage points. Excluding price factors, the exports in February fell by 19.7%, and the imports rose 1.7%.
2. Exports with major trading partner countries declined, imports from BRICS differentiated clearly. In February, exports with the United States, Japan and the European Union decreased 18%, 14.8% and 14.7%, the decline from the previous month expanded 13, 14.3 and 7.3 percentage points respectively. Imports from BRICS (China, Brazil, Russia, India, South Affrica) differentiated clearly, among which, imports from Brazil and Russia increased 19% and 0.1%, imports from South Africa and India were down 19.1% and 17.8%.
3. The negative growth of processing trade continued, the proportion of other trade increased. In February, the import and export of general trade was 789.2 billion yuan, down 17.6%, of which exports fell 24%. The import and export of processing trade was 448.8 billion yuan, down 15.6%, a negative growth for 12 consecutive months, exports was down 17.2%. The import and export of other trade was 196.1 billion yuan, down 7.3%, its proportion increased by 1.2 percentage points, of which the exports and imports dropped 12.3% and 2.7% respectively.
4. Export of high-tech products was better than the overall, import of some bulk commodity grew in quantity and fell in price. Export of mechanical and electrical products was 479 billion yuan, down 18.4%. Export of high-tech products was 237.3 billion yuan, down 11.6%, its proportion increased by 3.3 percentage points. Exports of seven categories of laborintensive products were 168.3 billion yuan, down 28.8%, among which, the exports of furniture, bags and shoes decreased by 33.4%, 31.9% and 29.8%. Import of some bulk commodity grew in quantity and fell in price, the import amount of crude oil, rubber, natural gas, iron ore, steel and soybean was up 24.4%, 14.9%, 13.8%, 8.5%, 6.8% and 5.8%, the import prices fell 35.2%, 17.2%, 27.1%, 34%, 14.8% and 12.9%.
5. The growth rate of state-owned and foreign enterprises fell after rise, imports of private enterprises increased. The import and export of state-owned enterprises reached 226.1 billion yuan, down 20.8%, of which exports and imports fell by 22.3% and 19.4% respectively. The import and export of foreign enterprises was 687 billion yuan, down 13%. The import and export of private enterprises was 520.9 billion yuan, down 16.9%, of which export was 362.9 billion yuan, down 23.2%, and import rose to 158.1 billion yuan, up 2.7%.
6. East China was better than the whole country, the fall range of the Central and West China expanded. The import and export of East China was 121.64 billion yuan, down 14.8%, 0.9 percentage points lower than the overall, of which the export fell by 18.7%, which proportion in the total export and import realized 2 percentage points higher. The import and export of Central China was 60.5 billion yuan, while the number in West China was 75.3 billion yuan, down 28.7% and 29.4% respectively.
Foreign Investment in China
From January to February, actual use of foreign investment was 141.88 billion yuan, an increase of 2.7%. The main characteristics of foreign investment are as follows:
1. The actual utilized foreign investment increased slightly, while newly established enterprises have declined. For the first two months of 2016, a total of 3,396 foreign-funded enterprises were approved, down 11.4% year on year. Actually utilized foreign investment reached 141.88 billion yuan (equivalent to US$22.52 billion), up 2.7% year on year (excluding data of banking, securities and insurance). In February, 1,388 foreign- funded enterprises were approved, down 11.3% year on year; actually utilized foreign capital was 53.63 billion yuan (equivalent to US$8.44 billion), up 1.8% year on year.
2. The actual absorption of foreign capital in service industry continued to grow, among which, high-tech service industry achieved a higher growth. From January to February, actual use of foreign investment in manufacturing was 39.1 billion yuan (equivalent to US$6.18 billion), down 14.9%, accounting for 27.6% of the national total. Actual use of foreign investment in service reached 89.16 billion yuan (equivalent to US$14.21 billion), an increase of 5.7%, accounting for 62.8% of the national total. Among them, actual utilized foreign capital in high technology service industry increased steadily, reached 15.91 billion yuan (equivalent to US$2.52 billion), accounting for 22.5% of the national total (excluding real estate). Actual utilized foreign capital in digital content and related services, information technology services, R & D and design services grew faster, realized 5.18 billion yuan (equivalent to US$0.83 billion), 4.66 billion yuan (equivalent to US$ 0.72 billion), and 3.06 billion yuan (equivalent to US$0.49 billion), increased 538.9%, 134.4% and 68.8% respectively.
3. Investments f rom main investment sources f luctuated significantly, investment from the United States, Japan, Singapore, the United Kingdom, Germany, etc., revealed an increasing tendency. From January to February, actual investment from the United States, Japan, Singapore, the United Kingdom and Germany reached 6.29 billion yuan ( US$1 billion), 4.23 billion yuan (US$0.66 billion), 5.75 billion yuan (US$ 0.9 billion), 2.87 billionyuan (US$ 0.46 billion) and 2.74 billion yuan ( US$0.44 billion), up 110.9%, 14.5%, 53.8%, 120.3% and 8.7% respectively.
4. Foreign investment in central and western regions increased significantly. From January to February, contractual FDI in Central and West China were 25.13 billion yuan (US$3.82 billion) and 15.86 billion yuan (US$2.44 billion), up 26.2% and 14%. Actual use of foreign investment in West China was 9.8 billion yuan (US$1.54 billion), up 8.1%, 5.4 percentage points higher than the national total.
5. Foreign mergers and acquisitions were becoming increasingly active. For the first two months of 2016, 199 foreign investment enterprises were establishment in the way of mergers and acquisitions, down 5.2%, actual utilized foreign capital was 39.92 billion yuan (US$6.09 billion), an increase of 17.3%. The proportion of mergers and acquisitions in the actual use of foreign investment rose to 28.1% from 24.6% of the same period last year.
Overseas investment and economic cooperation
Direct investment abroad From January to February, China’s non-financial foreign direct investment reached 195.97 billion yuan, equivalent to US$29.92 billion, an increase of 71.8%. Investment in the “Belt and Road” countries was US$2.33 billion, up 41.1%, accounting for 7.5% of the total. Looking from the composition of domestic investors, local direct investment was US$25.8 billion, 2.95 times of last year, accounting for 86.2% of the total FDI. As for the composition of industry, in the f irst two months of 2016, foreign investment mainly flowed to the business services industry, the number reached US$10.26 billion, up 31%, and accounted for 34.3% of the total investment; investment of manufacturing industry was US$3.93 billion, up 145.6%, accounted for 13.2%, among which, US$ 1.82 billion was invested in equipment manufacturing industry, an increase of 193.5%, accounting for 46.3% of the total FDI in manufacturing industry. Contracted projects overseas In the first two months of 2016, the value of new- signed contracts amounted to 206.65 billion yuan, equivalent to US$31.55 billion, up 7.4% year on year. The turnover of China’s contracted projects overseas was 121.7 billion yuan, equivalent to US$18.58 billion, down 11% year on year. From January to February, Chinese enterprises signed 421 new contracts with the “Belt and Road” countries/ regions, amounting to US$ 15.46 billion, which accounted for 49.0% of the total, an increase of 53.2%. Labor service cooperation overseas From January to February, labor service personnel dispatched overseas reached 65,000, a decrease of 4,000 over the same period of 2015. In February, all labor service personnel dispatched overseas reached 29,000, a decrease of 5,000 over the same period of 2015. By the end of February, all labor service personnel dispatched overseas were 989,000, an increase of 17,000 compared with last year over the same period.
(Source: Press Conference of Ministry of Commerce on March 17, 2016)