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SCIO briefing on China's import and export performance in H1 2023

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China News Service:

We noticed that the growth rate of foreign trade has dropped significantly in the recent two months, with negative growth in exports. How do you see this change? Thank you.

Lyu Daliang:

Thank you for your question. We noticed that people have paid attention to the recent changes in the year-on-year growth rate of foreign trade and there are also some voices of concern on the internet. We believe that the development of China's foreign trade remains stable on the whole. Although the year-on-year growth has slowed its pace, the month-on-month growth rate has increased steadily. China's foreign trade has increased in the second quarter compared with the first quarter. Month-on-month growth was also recorded for the last two consecutive months. So there are foundations for the stable development. Meanwhile, the stable development is also reflected in the following aspects:

First, in terms of scale, China's foreign trade has maintained growth, and it has grown significantly. The country's foreign trade has maintained growth in the first half of the year, with its scale hitting a new high of 20.1 trillion yuan (about 2.81 trillion U.S. dollars). It is the first time China's goods imports and exports exceeded 20 trillion yuan in the January-June period, which is a landmark new breakthrough. The breakthrough has been achieved amid a complicated, grim external environment, the slowdown in global trade and investment, and fading driving factors, such as anti-epidemic supplies and stay-at-home economy products. This is really not easy. The total value of China's imports and exports increased by more than 400 billion yuan year on year in the first half of this year, which is equivalent to the total value of over 3 million vehicles exported from the country throughout last year.

Second, in terms of the foundation, China's foreign trade has increased in volume and enjoyed more solid growth. Price and volume are two apparent factors that affect the scale of foreign trade. According to calculations, both China's imports and exports have decreased compared with the same period last year. In the second quarter, the imports and exports have both increased compared with the same period last year, with imports growing 5.9% and exports growing 2%. Imports of energy products and exports of automobiles grew by more than double digits year-on-year. The increase in trade volume has led to the growth of trade scale, which means that the country's foreign trade has a solid foundation and has enjoyed real growth.

Third, the advantage of China's foreign trade has consolidated, and its proportion has increased from a global perspective. The WTO forecast that the volume of global goods trade will grow by 1.7% this year, much lower than the average of 2.6% over the past 12 years. A slowdown in the growth of world trade is a common challenge for all economies, and the difficulties are more global. Compared with those neighboring economies who have released their statistics, China's foreign trade has demonstrated its strong resilience, and its competitive edge has stabilized and strengthened. According to our calculations based on the latest WTO statistics, in the first four months, the proportion of China's exports in the international market has increased slightly, which means that the country's foreign trade has shown stronger competitiveness.

As I just mentioned, China's foreign trade is facing pressure, fluctuations, and challenges. However, as a Chinese saying goes, "The journey ahead may be long and arduous, but we will eventually reach our destination if we keep going." The fundamentals underpinning China's long-term economic growth remain robust. China has a good industrial system and complete production capacity. The country's foreign trade has great resilience and vast room for maneuver. Meanwhile, China remains committed to opening up to the outside world and actively promotes international economic and trade cooperation. It has rolled out a series of policies and measures to stabilize foreign trade, and a combining effect has continued to emerge. So there is still a solid foundation for stabilizing the scale and improving the structure of foreign trade. We are confident that we will continue to consolidate our market share throughout 2023 to maintain our position as the world's largest trader of goods. Thank you.