Trade data shows re­silience of the Chi­nese econ­omy

China Daily - - COMMENT -

In yet an­other sign of the re­silience of the Chi­nese econ­omy, the coun­try’s for­eign trade reached a his­toric high of 30.51 tril­lion yuan ($4.62 tril­lion) in 2018, an in­crease of 9.7 per­cent from the pre­vi­ous year, ac­cord­ing to fig­ures from the Gen­eral Ad­min­is­tra­tion of Cus­toms re­leased on Mon­day.

That is in­deed re­mark­able given the ris­ing pro­tec­tion­ism glob­ally and the on­go­ing trade fric­tions be­tween China and the United States, and it re­flects how well China has adapted it­self to the fast-chang­ing and com­pli­cated ex­ter­nal sit­u­a­tion, with the gov­ern­ment pro­vid­ing timely pol­icy sup­port.

Mea­sures al­ready taken range from the “sig­nif­i­cant” low­er­ing of tar­iffs on im­ports such as ve­hi­cles and auto parts, moves to broaden mar­ket ac­cess and re­forms to im­prove the busi­ness reg­u­la­tory en­vi­ron­ment. The re­cent World Bank’s Do­ing Busi­ness 2019 re­port, which ranks economies based on how easy it is to do busi­ness in them, iden­ti­fied China as one of the top 10 im­provers in busi­ness reg­u­la­tion, ris­ing to 46th com­pared to 78th last year.

But de­spite the over­all pos­i­tive pic­ture, pes­simists have pointed to the De­cem­ber fig­ures — which show both ex­ports and im­ports fell, by 4.4 per­cent and 7.6 per­cent, from a year ear­lier — as an in­di­ca­tion China’s econ­omy may be los­ing mo­men­tum due to weak­en­ing over­seas mar­kets and cool­ing do­mes­tic de­mand.

But it is not the first drop in the monthly fig­ures, as the growth rates of ex­ports and im­ports fluc­tu­ate due to sea­sonal fac­tors, global com­modi­ties prices or base fig­ures for the cor­re­spond­ing month of pre­vi­ous year. Ac­tu­ally, China’s for­eign trade in­creased quar­ter-on-quar­ter in 2018, sug­gest­ing a healthy trend.

Of course, un­cer­tain­ties abound, es­pe­cially in ex­ter­nal de­mand from tra­di­tional over­seas mar­kets such as the US and the Euro­pean Union. That is why China has sought in re­cent years to ex­plore op­por­tu­ni­ties in new mar­kets, es­pe­cially along the Belt and Road routes. Trade with such coun­tries reg­is­tered faster-than-av­er­age growth of 13.3 per­cent in 2018, in­di­cat­ing they have be­come a new “driv­ing force” for the for­eign trade of the world’s largest trad­ing na­tion.

Its trade fric­tions with the US may con­tinue to be a source of worry — as ac­cen­tu­ated by the lat­est fig­ure that sug­gests the trade sur­plus be­tween the two coun­tries rose to $323 bil­lion last year, the high­est since 2006. But the im­pact it will have on its eco­nomic well-be­ing is likely to be lim­ited be­cause China’s de­pen­dence on ex­ports has been de­clin­ing over the years — from 70 per­cent in 2007 to less than 20 per­cent nowa­days as the coun­try seeks to shift its eco­nomic growth from ex­port-ori­ented to do­mes­tic de­mand-driven.

And all the eco­nomic in­di­ca­tors sug­gest a healthy Chi­nese econ­omy — for ex­am­ple, it has reg­is­tered eco­nomic growth in the 6.7 per­cent to 6.9 per­cent range for 12 con­sec­u­tive quar­ters.

This, to­gether with the lat­est trade fig­ures, should in­still op­ti­mism in the prospects for the coun­try’s econ­omy in 2019.

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