Foreign trade shows resilience
Two-way flows edge higher in 2023 but uncertain external environment poses challenges
China’s foreign trade, buoyed by well-focused government support, an optimized trading structure, and the diversification of trading partners, posted a better-than-anticipated performance in 2023, officials and experts said on Jan 12.
However, given the sluggish external demand, rising trade protectionism, intensifying geopolitical tensions, and recent disruptions to key trade routes, the country may still face severe challenges, they said, calling for more favorable policies to help businesses navigate the mounting headwinds in trade.
China’s foreign trade totaled 41.76 trillion yuan ($5.82 trillion) in 2023, up 0.2 percent year-on-year, Wang Lingjun, vice-minister of the General Administration of Customs, said at a news conference on Jan 12.
Noting that exports edged up 0.6 percent year-on-year to 23.77 trillion yuan last year, Lyu Daliang, the administration’s spokesman, said that while the growth rate of exports may appear to have decelerated, it is crucial to consider the substantial base from which China’s exports are expanding.
The country’s foreign trade operations have maintained overall stability in 2023, with a notable improvement during the fourth quarter. In particular, total imports and exports for December alone came in at 3.81 trillion yuan, hitting a record high on a monthly basis.
The strong finish in China’s foreign trade last year, when global trade slowed as higher interest rates in
the United States, Europe, and other major consumer markets dampened demand, will shore up business sentiment, said Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges.
Looking ahead, the global economy will continue to grapple with an arduous recovery process, and the pace of the global trade revival remains stagnant, posing grave challenges for China to continue its stable foreign trade growth, Zhang said.
The outlook for global trade in 2024 remains “highly uncertain and generally
pessimistic”, the United Nations Conference on Trade and Development said in a report released in mid-December, citing factors such as ongoing geopolitical tensions, escalating debt, and widespread economic fragility.
Still, according to a recent survey, more than three-quarters of the companies anticipate stable or increased trade activities this year.
The positive outlook for China’s foreign trade sector is attributable to preferential policy mixes, as well as a diversified range of trade partners
and an increased export proportion of high-value-added products, said Xu Hongcai, deputy director of the China Association of Policy Science’s Economic Policy Committee.
Outbound shipments of mechanical and electrical products — highlighted by electric vehicles, lithium batteries, and solar cells — climbed 2.9 percent year-on-year to 13.92 trillion yuan and accounted for 58.6 percent of the total exports, official data showed.
As for total overall imports, which fell 0.3 percent year-on-year to 17.99 trillion yuan in 2023, spokesman Lyu said the marginal decrease was primarily driven by a decline in prices. The quantity of imports recorded a growth of 2.9 percent year-on-year.
As China’s top leadership has reiterated the nation’s commitment to further deepening reforms and continue efforts to attract more long-term foreign investment, international institutions are upbeat about the nation’s economic prospects.
During a meeting on Jan 10 with members of the China Securities Regulatory Commission International Advisory Council, Vice-Premier He Lifeng said the overall trend of China’s economic recovery and long-term improvement remains unchanged.
China will continue to deepen reform, facilitate cross-border investment and financing, and attract more foreign financial institutions and long-term capital to the country, the vice-premier was quoted as saying by Xinhua News Agency.
Established in June 2004, the International Advisory Council is an expert advisory body of the CSRC, composed of senior overseas financial regulatory officials, senior executives of financial institutions, well-known experts, and scholars.
Sun Lijun, co-head of global banking for UBS Securities, said progress made in 2023, both in introducing capital to the Chinese market and facilitating Chinese companies’ reach in overseas markets, reflects China’s firm stance in expanding high-level opening-up.