China’s timely resumption of its industrial production and the gradual return of overseas demand have helped put the country’s foreign trade recovery on a firm footing, and the trend is expected to continue in the second half of the year, experts and business leaders said on Friday.
The comments came as China’s foreign trade volume rose by 6.5 percent on a yearly basis to 2.93 trillion yuan ($412.1 billion) in July, according to the General Administration of Customs.
China’s exports beat market expectations in July, surging by 10.4 percent year-on-year to 1.69 trillion yuan, while the country’s imports grew by 1.6 percent to 1.24 trillion yuan.
Experts called the July trade data an encouraging sign that the country’s trade policy measures have produced positive results. Despite the COVID-19 pandemic and other global economic uncertainties, China’s new “dual-cycle” development pattern proposed by the central leadership, the country’s potential for consumer purchases and its fast-growing digital economy will also help strengthen the country’s foreign trade, they added.
The advantage for China’s foreign trade lies in the integration of processing and manufacturing, general trade and cross-border e-commerce, which has been conducive to stabilizing the nation’s industrial chain and easing external pressure over the past several months, said Wei Jianguo, vice-chairman of the China Center for International Economic Exchanges.
He said that China’s foreign trade, backed by well-developed rail and maritime shipping networks, has seen new formats since January. Among them, cross-border e-commerce has developed notably, and many export-oriented firms have increasingly relied on this method to gain new orders from both developed and developing markets.
The country’s foreign trade reached 17.16 trillion yuan, dropping 1.7 percent year-on-year in the first seven months of this year, representing a narrowing by 1.5 percentage points compared with the decline in the first half, customs officials said.
In the meantime, China’s foreign trade with the Association of Southeast Asian Nations, its largest trading partner, jumped 6.6 percent year-on-year to 2.51 trillion yuan in the first seven months, while its trade volume with the European Union grew 0.1 percent on a yearly basis to 2.41 trillion yuan.
Guo Yongbin, an analyst at Everbright Securities, said China’s exports growth in July was stronger than expected and the gradual resumption of business activities in overseas markets has helped drive the growth.
“While the global economic recovery may see a bumpy road, the general direction of the economy moving out of the pandemic’s impact is certain. However, any resurgence of new COVID-19 cases in overseas markets could still weigh on the rebound of China’s exports,” Guo said in a research note.
China has already started to opt for a “dual-cycle” development pattern, meaning facilitating a smooth functioning of the economic cycles of both the domestic and global markets－with the performance of the domestic economy being the mainstay, said Li Yiping, a professor at the School of Economics of Renmin University of China in Beijing.
Such a mode comprises the optimum exploitation of domestic market resources and exchanges between the domestic and international markets, he said.
At a recent meeting to analyze the economic situation and plan for the second half of the year, the top leadership said the country still faces uncertain situations and problems that are likely to exist in the medium to long run, and urged the country to accelerate the establishment of a “dual-cycle” development pattern.
China has also set goals to improve the business environment and deepen economic cooperation in more fields with countries and regions related to the Belt and Road Initiative, as well as to accelerate the pace of sealing more bilateral and multilateral free trade deals with economies such as Japan, South Korea, the ASEAN and the European Union, according to the Ministry of Commerce.
LONGi Green Energy Technology Co, a major Chinese manufacturer of monocrystalline silicon photovoltaic products, saw its exports of photovoltaic units, mainly to Europe, jump 62.5 percent on a yearly basis to 3.9 gigawatts in the first half of this year, thanks to these markets’ gradual recovery.
Zhong Baoshen, chairman of the Xi’an-based company, predicted that the value of the company’s exports will grow 50 percent year-on-year to 12 billion yuan in 2020. The company currently is recruiting 17,000 people for both its overseas and home plants to meet the growing market demand. Its employee ranks are forecast to reach 45,000 next year.
In the next step, the government should introduce new policies to support China’s exports of manufactured goods produced by both domestic and foreign companies so they will become a greater stabilizing force in the global economy, said Dong Yu, deputy dean of the China Institute for Development Planning at Tsinghua University in Beijing.
It is also necessary to expand imports to stabilize the confidence of foreign suppliers and invigorate supplies from overseas markets, said Chen Bin, executive vice-president of Beijing-based China Machinery Industry Federation.