Growth entails successful transition
That China’s total export-import volume has maintained a stable growth of 2.8 percent year-on-year in the first three quarters, according to data released by the General Administration of Customs on Monday, offers more food for thought than usual.
On the one hand, with the World Trade Organization lowering its projection of the world’s trade growth this year from 2.6 percent to 1.2 percent, China’s foreign trade can still be called remarkable, especially in light of the performance of Germany, Japan, the Republic of Korea and some other major players in trade.
On the other hand, although China is still the largest trader of goods, a weakening momentum is evident, as China’s exports in September fell 3.2 percent from a year earlier, while imports declined by 8.5 percent compared with the same month last year.
And it is noteworthy that in the first three quarters, China’s trade with the United States declined 10.3 percent, compared with the 15.6 percent and 13.7 percent growth of its trade with the European Union and the Association of Southeast Asian Nations, China’s top two trade partners.
Although China’s economy remains resilient and it still has a lot of potential that remains untapped, the negative effects of the trade frictions with the US are undeniably palpable. These have been compounded by China’s bid to transition from growth driven by trade and investment to growth propelled by innovation and consumption.
Like it or not, although China can secure providers of chips and agricultural products to fill in the vacuum left by the US, the effect of the trade frictions on Chinese manufacturing and its consumer confidence has been prominent.
So, hopefully, the “substantial progress” made in last week’s trade talks can serve as a turning point for the world’s two largest economies to put their trade relations back onto a normal track.
That said, even if a deal with the US does materialize, and given the US administration’s record that can still not be considered a 100-percent certainty, China must continue to advance difficult domestic structural reforms as a successful transition away from trade-driven growth is essential for its future development.
Although the resilience of the Chinese economy has been demonstrated by its strong performance despite the trade war the US has been waging against it, the external environment facing China’s foreign trade development is still complicated and severe, with instability and uncertainty increasing.
Innovation, a responsive policy portfolio founded on strategic composure and decisiveness, and a law-based open market nourishing pluralism — all that reform heralds — are the means to stabilize and ensure the sustainability of the country’s economic growth.