General Administration of Customs: Three major negative factors affecting China’s foreign trade situation

At 10 a.m. on October 13, the State Council Information Office held a press conference in the press conference hall. Zheng Yuesheng, spokesperson of the General Administration of Customs and director of the Comprehensive Statistics Department, introduced the import and export situation in the first three quarters of 2014.
Zheng Yuesheng said that China’s foreign trade has improved quarter by quarter in the first three quarters of this year. This good trend is expected to continue in the fourth quarter, especially in terms of exports. China’s foreign trade export leading index shows that the pressure on domestic and foreign trade exports will further ease in the next two to three months. Of course, when we analyze the situation facing China’s foreign trade, we must not only see the positive aspects that are beneficial, but also pay attention to the aspects that have some negative impact on the foreign trade situation. In this regard, attention is drawn to three main factors:
First, the international competitiveness of my country’s export products has been weakened. The transfer of manufacturing to neighboring countries such as Southeast Asia is accelerating, and the share of my country’s labor-intensive products in major markets such as Europe, the United States, and Japan continues to decline. In recent years, with the continuous increase in minimum wage standards across my country, the comprehensive operating costs of labor, financing, land and other enterprises have continued to rise, and resource and environmental constraints have also continued to increase. The competitive advantages of my country’s traditional industries are reflected in exports. weakened. According to our monthly tracking survey of 3,000 companies, about 65% of companies report that the comprehensive cost of production continues to rise every month. On the other hand, the traditional labor-intensive manufacturing industry, which is one of the advantages of my country’s export products, is gradually accelerating its transfer to Southeast Asian countries, and the share of my country’s related products in the international market is also declining. Among them, since 2001, the market share of my country’s seven major categories of labor-intensive products such as clothing and textiles in developed economies in Europe, the United States and Japan has continued to decline. In the first half of this year, the share of my country’s seven major categories of labor-intensive products, including textiles and clothing, in the developed economies of Europe, the United States, and Japan fell by 0.1, 0.4, and 2.8 percentage points respectively. During the same period, the share of Vietnam’s similar products in the European, American, and Japanese markets fell. They increased by 0.2, 0.7 and 1.1 percentage points respectively. This is the first factor that needs to be focused on.
Second, with the sharp decline in investment in my country’s manufacturing industry from some developed countries, some medium-term constraints have been imposed on exports. In recent years, in order to boost their domestic economy and expand employment, some developed countries have accelerated the return of some manufacturing industries to the country. Accordingly, investment in my country’s related manufacturing industries has cooled down. In the first eight months of this year, the actual utilization of foreign investment in my country’s manufacturing industry dropped by approximately 15.7%, with sharp declines of 17.8% and 29.1% in July and August respectively, marking the 15th consecutive month of year-on-year decline. Nearly half of my country’s exports are created by foreign-invested enterprises. The decline in the actual use of foreign capital in my country’s manufacturing industry will impose medium-term constraints on our country’s exports.
Third, the prices of bulk commodities continue to fall, correspondingly lowering the value of imports. Since the beginning of this year, some commodities around the world have experienced oversupply and prices have continued to fall. As I just mentioned, in the first three quarters of this year, the import prices of major energy resource products such as iron ore, crude oil, copper, and soybeans that my country imported showed significant year-on-year declines. . In the first three quarters of this year, my country’s overall import price level fell by 2.6% year-on-year, and monthly import prices have fallen year-on-year for 31 consecutive months. The decline in the average price of bulk commodity imports is conducive to improving my country’s trade conditions. We can purchase more commodities with the same foreign exchange. But at the same time, the decline in prices of the same imported goods has also slowed down the growth rate of the current import value to a certain extent.
In addition, at the end of September, the World Trade Organization just lowered its latest expected data for global trade growth this year. The World Trade Organization expects global trade growth in 2014 to be approximately 3.1%, which is 1.6 percentage points lower than the 4.7% forecast in April. Risks such as geopolitics and the game of relations between major countries may also affect the further trend of my country’s foreign trade. However, we predict that in the fourth quarter of this year, my country’s foreign trade import and export situation will continue to improve.