Ministry of Commerce: Foreign trade is expected to rebound from stabilization

This Thursday, the General Administration of Customs will release import and export data for April. The “China’s Foreign Trade Situation Report (Spring 2014)” released by the Ministry of Commerce on the 5th predicts that after May this year, as the base factors affecting my country’s foreign trade growth rate disappear, foreign trade data will more truly reflect the actual operation situation and is expected to show Stabilizing the recovery trend. As long as the external environment does not change significantly, my country’s import and export is expected to maintain relatively stable growth throughout 2014.
​Complex The external environment is slightly better than last year
The latest data shows that the world economy is generally improving: leading indicators of the U.S. economy continue to improve. In April, the U.S. manufacturing output index reached 58.2, a new high since March 2011; in April, the Eurozone comprehensive The Purchasing Managers Index reached 54, a new high since May 2011; in March, the Eurozone Economic Sentiment Index, which reflects economic confidence, rose to 102.4, higher than the expected 101.4, the highest since July 2011. In addition, the Japanese economy continues to recover slowly, and emerging economies continue to maintain low-speed growth.
“China’s Foreign Trade Situation Report (Spring 2014)” pointed out that although the world economy generally tends to improve, risk factors are still prominent. The improvement in the U.S. labor market has led to a rebound in consumer confidence, and rising stock prices and housing prices have stimulated companies to expand investment. The euro zone’s moderate economic recovery has been established, the high unemployment rate has fallen, the rising trend of government debt has been reversed, and monetary policy may be further relaxed to avoid the risk of deflation. The Japanese economy has basically escaped long-term deflation. Although it will face the impact of an increase in the consumption tax rate starting in the second quarter, increased fiscal expenditure is expected to play a buffering role to a certain extent.
However, “the withdrawal of the United States from quantitative easing is the biggest variable facing the world economy.” The Ministry of Commerce reported that since the beginning of 2014, the Fed’s monthly quantitative easing scale has been reduced by US$30 billion, from US$85 billion at the end of 2013 to US$55 billion. Barring any major unexpected events, the Fed is expected to completely exit its quantitative easing policy within the year. The Fed’s tightening of monetary policy is bound to accelerate the redistribution of international capital and affect the recovery process of other developed countries and emerging economies. Asset prices in some countries with fragile economic fundamentals have experienced sharp adjustments, and financial market turmoil has intensified.
What is worrying is that the economic growth of emerging economies is generally weak. “Judging from leading indicators such as the manufacturing purchasing managers’ index, the economic growth advantage of emerging economies over developed economies will continue to shrink in the coming period, and the economic growth situation of some countries with fiscal and current account ‘twin deficits’ may even worsen. .” The report stated.
The report stated that the environment faced by China’s foreign trade development in 2014 was slightly better than that of the previous year. China’s foreign trade has the conditions to achieve stable growth, but there are many difficulties and challenges, and the serious and complex side of the situation cannot be underestimated.
Difficulties International competitiveness faces challenges
The Ministry of Commerce report believes that uncertainty in external demand is the primary challenge facing my country’s foreign trade development this year. Among them, the biggest market risk comes from emerging economies. Emerging countries generally have weak economic growth and weak import demand. At the same time, developed countries are actively promoting “re-industrialization” and, while maintaining the competitive advantages of high-end manufacturing, they have also restored the competitiveness of traditional manufacturing to a certain extent. Their economic recovery is obviously out of sync with the growth of import demand.
Song Hong, director of the International Trade Research Office of the Institute of World Economics and Politics of the Academy of Social Sciences, pointed out that in recent years, emerging economies have become the largest contributor to China’s export growth, but now, due to the tightening of macroeconomic policies and the superposition of structural contradictions, financial The market is in turmoil, the downward pressure on the economy is increasing, and the engine of emerging economies is beginning to lose momentum.
Judging from the first quarter foreign trade data, China’s import and export growth to major emerging markets lags behind developed markets. In the first quarter, China’s imports and exports to ASEAN increased by 4.9%, of which exports increased by 6.8% and imports increased by 2.9%. China’s imports and exports to other BRICS countries fell by 3.1%, of which exports increased by 1.6% and imports fell by 7%.
In addition, the trade friction situation remains severe. The report stated that in the context of low-speed global economic growth and generally high unemployment rates, some countries are still implementing various forms of trade protectionism in order to maintain the market share of their own industries. Not only have developed countries set up trade barriers at various levels, but some developing countries have also frequently introduced new trade restrictions. China has been the biggest victim of global trade protectionism in recent years.
Data from the Ministry of Commerce show that in 2013, China encountered a total of 92 trade remedy investigations initiated by 19 countries and regions, an increase of 18% over 2012, of which approximately two-thirds were initiated by emerging economies and developing countries. .In the first quarter of 2014, China encountered another 27 trade remedy investigations initiated by 11 countries and regions, a year-on-year increase of 23%. Among them, the United States launched anti-dumping and countervailing investigations on multiple Chinese products. In an environment of increasingly fierce international competition, trade friction has become an important factor affecting the stable growth of China’s exports.
In addition to risks from the outside, my country’s export competitiveness currently faces multiple challenges. Huo Jianguo, director of the Research Institute of the Ministry of Commerce, said that the first quarter foreign trade data showed that the pressure on foreign trade growth this year was relatively high. Although Hong Kong was excluded,The factors have increased, but they are still weaker than in previous years. This shows that it is not entirely a base problem, but a structural problem, and there are problems with China’s export competitiveness.
Reporters recently interviewed a number of export companies at the 115th Canton Fair. They all said that the rising costs of labor, land, etc. have put them under great pressure. This is especially true for small and medium-sized enterprises with weak bargaining power, and high costs are constantly encroaching. Their profit margins are not high.
Huo Jianguo said that currently, the costs of China’s labor, land and other factors are still continuing to rise, and the competitiveness of traditional labor-intensive industries continues to weaken. Affected by rising costs, China’s traditional labor-intensive industries have a clear tendency to transfer export orders and production capacity to neighboring countries. In his view, in the process of accelerating “going out”, adjusting industrial structure, and digesting excess production capacity, we must take into account the growth mechanism of consolidating the competitive advantages of domestic traditional industries and stabilizing foreign trade exports. To speed up structural adjustment, we must especially solve the problem of utilizing foreign capital in high-end manufacturing, while consolidating and improving the competitive advantages of domestic traditional advantageous industries.
Optimistic: Data is expected to stabilize and rebound from May
Previously, first-quarter data released by the General Administration of Customs showed that in the first quarter of 2014, China’s total import and export volume was US$965.9 billion, a year-on-year decrease of 1%. Among them, exports fell by 3.4%, imports increased by 1.6%; the trade surplus fell by 59.8%.
Song Yu, China macroeconomist at Goldman Sachs Gao Hua, believes that some improvements in import and export growth may begin to appear in April. In view of the fact that the government began to rectify the problem of exporters’ inflow of auxiliary funds through over-reporting of exports in the second half of 2013, the year-on-year base number declined. The sequential growth rate may also be supported by real effective exchange rate depreciation. The month-on-month increase in imports may also be driven by the relaxation of domestic policies and the month-on-month increase in import prices. The year-on-year growth rate of exports in April is expected to rise to 1% from -6.6% in March, and the year-on-year growth rate of imports is expected to rise to 1% from -11.3% in March.
“After May 2013, China strengthened trade supervision and arbitrage trade was basically contained. Therefore, it can be expected that after May this year, as the base factors affecting China’s foreign trade growth disappear, foreign trade data will more truly reflect the actual operation. The situation is expected to show a stabilizing and rebounding trend.” The Ministry of Commerce report believes that the poor performance of import and export data in the first quarter was mainly due to the arbitrage trade in the same period in 2013 that raised the base.
The State Council executive meeting held on April 30 proposed that we must take into account both the current and the long-term, and take decisive and effective measures to promote the steady growth of imports and exports. Specifically, it includes five measures: optimizing the foreign trade structure; improving the level of trade facilitation; improving financing services; further accelerating the entry of export tax rebates to ensure timely and full tax rebates; and enhancing the competitiveness of enterprises.
Looking forward to the whole year, the Ministry of Commerce reported that in recent years, the country has introduced a series of policies and measures to promote the development of foreign trade, and the positive effects are emerging. As long as the external environment does not change significantly, China’s imports and exports are expected to maintain relatively stable growth throughout 2014
Song Hong told reporters that overall, this year’s foreign trade growth should be the same as last year or better. From the actual feelings of export enterprises, the feeling of actual growth will be more obvious and real, because last year, affected by false trade, the foreign trade data was relatively watery.
Huo Jianguo said that structural changes in foreign trade will continue to appear and play a supporting role, becoming the endogenous driving force for the stable growth of foreign trade in 2014. Overall, foreign trade will still maintain steady growth in 2014, which may be slightly better than that in 2013, and the growth rate is expected to exceed 8%.