New forces, bigger sales grids to stabilize trade
Policy support, free trade deals, industrial upgrade vital
New quality productive forces and Chinese manufacturers’ ongoing efforts to broaden their sales networks globally will help China to stabilize its foreign trade this year amid a challenging global business environment, said government officials and scholars on Thursday.
Despite challenges like “decoupling” practices by some Western countries, they are optimistic about China’s trade recovery and progress in 2024, thanks to its advantages from solid policy support, continued industrial upgrading and the benefits generated by various free trade deals, as well as the country’s vast consumption potential.
China’s foreign trade reached a record high of 6.61 trillion yuan ($847.4 billion) in the first two months of the year, up nearly 9 percent year-on-year and signaling a strong start to 2024, the General Administration of Customs said.
During the period, China’s foreign trade continued the positive trend that began in the fourth quarter of last year, achieving year-on-year growth for five consecutive months. Exports of certain products like automobiles, home appliances and ships saw significant increases, said Lyu Daliang, director of the GAC’s statistics and analysis department.
Since the beginning of this year, against the backdrop of increasing complexity and uncertainty in the global market, China’s exports have achieved double-digit growth, thanks to its exporters’ strong innovation capabilities and high-quality products, further consolidating the nation’s competitive advantages, said Lyu.
As for the composition of exports, GAC data showed that electromechanical products constituted nearly 60 percent during the January-February period, with automatic data processing equipment, integrated circuits and automobile exports recording substantial growth rates.
In addition to witnessing a growing trade volume with major trade partners like the Association of Southeast Asian Nations, the United States and South Korea in the first two months, China’s foreign trade with other economies participating in the Belt and Road Initiative amounted to 3.13 trillion yuan, up 9 percent year-on-year, GAC data showed.
Emerging markets, new foreign trade formats and the development of new quality productive forces have already become the main export drivers in many parts of China, especially in the Yangtze River Delta and Pearl River Delta regions, said Quan Heng, a deputy to the 14th National People’s Congress, the nation’s top legislature, and a researcher at the Shanghai Academy of Social Sciences.
“New quality productive forces” is a key term in this year’s Government Work Report. According to the report, China will strive to modernize its industrial system and develop new quality productive forces at a faster pace. Companies nationwide from the traditional manufacturing sector to the emerging technical sector are taking the practical path of developing new quality productive forces.
The acceleration in developing new quality productive forces is, to some extent, driven by the rapid transformation of China’s population and industrial structures. This move will be crucial for China’s economic growth, especially in promoting the growth of foreign trade, said Yang Decai, a member of the 14th National Committee of the Chinese People’s Political Consultative Conference, the nation’s top political advisory body, and a professor at Nanjing University’s Business School.
According to a report by CITIC Securities released in January, China’s sluggish export situation is expected to witness a reversal for the better this year, with an estimated growth rate of around 2 percent for the entire year.
Factors such as slow global economic growth, growing trade protectionism and escalating geopolitical tensions, however, continue to affect the country’s foreign trade environment.
To avoid restrictions imposed by certain countries, capable Chinese companies should now consider building manufacturing facilities in some key overseas nodes, thereby achieving a high-level reorganization of the global supply chain under the new circumstances, said Jin Li, a member of the 14th National Committee of the CPPCC and vice-president of Shenzhen, Guangdong province-based Southern University of Science and Technology.