Steady growth of foreign trade reflects three positive changes in China's economy

Release time:

2019-04-15

The first quarter of China's foreign trade data released on the 12th. Although the 3.7 per cent growth rate is lower than the 9.4 per cent growth in the same period last year, it is rare to achieve this growth in the overall downturn in global trade and trade frictions. In particular, in March, China's exports surged 21.3 per cent year-on-year, significantly better than market expectations.

Behind the steady growth of foreign trade, three positive changes in China's economy are reflected.

-- Economic performance indicators pick up

Trade is the "barometer" of the domestic economy ". China's foreign trade remained stable in the first quarter, which is directly related to the stabilization of the domestic economy.

Some indicators have picked up: China's manufacturing purchasing managers' index and non-manufacturing business activity index both rebounded in March, especially the manufacturing PMI rose to 50.5 per cent and returned to the expansion range three months later, while Caixin's manufacturing PMI also hit an eight-month high.

In the first two months, China's excavator production increased by 52.3 year-on-year, and the growth rate was 4.4 percentage points faster than that of last year. The accelerated rise of the "excavator index" reflected the recovery of infrastructure investment; the year-on-year growth rate of fixed asset investment was also higher than that of last year.

The market is also optimistic about China's economic prospects. Xie Yaxuan, a macro analyst at China Merchants Securities, said that from the performance of leading and synchronized indicators, the current economic situation in China "may be better than previously expected". The International Monetary Fund (IMF) recently lowered its forecast for global economic growth in 2019, while raising its forecast for China's economic growth from 6.2 per cent to 6.3 per cent. As China's economy further shows positive changes, there will be more favorable conditions for trade development.

-- Enhancing the vitality of the private economy

In 2018, the contribution of private enterprises to China's import and export growth has exceeded 50%, becoming a highlight of foreign trade development. In the first quarter of this year, the pulling effect of private enterprises on China's foreign trade became more and more prominent.

According to official data, the total import and export volume of China's private enterprises reached 2.84 trillion billion yuan (RMB, the same below) in the first quarter, an increase of 9.9 percent over the same period last year, accounting for 40.6 percent of China's total foreign trade, exceeding 40 percent for the first time, an increase of 2.3 percentage points over the same period last year. Among them, the exports of private enterprises accounted for 49.3 percent of China's total exports and imports accounted for 30.4 percent of total imports.

Li Kuiwen, spokesman for the General Administration of Customs, said that private enterprises have become the main force driving China's import and export growth, and the driving force for market entities to participate in the development of foreign trade has become stronger.

According to the government work report, this year China will take a series of measures to provide a good development environment for enterprises, including large-scale tax cuts and fee reductions; increase the targeted RRR cuts for small and medium-sized banks to alleviate the financing difficulties and expensive financing problems of private and small and micro enterprises; further Reduce approval items and accelerate the clearance of various regulations and practices that hinder fair competition.

Analysts believe that under the favorable policies, the ability of private enterprises to withstand pressure is expected to be further improved this year, and it is expected to perform better in foreign trade activities.

-- Improve the competitiveness of high-end products

Another embodiment of the quality and efficiency of China's foreign trade and even the whole Chinese economy is that the competitiveness of products with high technical level and added value, such as automobiles and mobile phones, is becoming stronger and stronger.

At present, the export volume of mechanical and electrical products has accounted for nearly 60% of China's total exports, which is more than three times that of labor-intensive products such as clothing and textiles, and is the undisputed main force of exports. Among them, mobile phones, cars, computers and other popular overseas. According to the General Administration of Customs, China's exports of computer equipment, metal processing machine tools and automobiles increased by 10.5, 26.5 and 15.1 respectively in the first quarter.