The government work report delivered by Premier Li Keqiang on Friday did not mention any specific numbers for this year's foreign trade growth. Instead, it referred to "steady growth in imports and exports". This not only indicates that foreign trade will be more quality-oriented this year, but also indicates that the government is paying more attention to the cultivation of export competitiveness.
In the 2015 government work report, we found that the only major targets for economic and social development that we have set out are the growth rates of imports and exports. China's exports contracted 2.8 per cent in dollar terms in 2015, the first annual decline since 2009. China's total value of imports and exports in January was 1.88 trillion yuan, down 9.8 percent year on year, due to weak external demand and falling import and export prices. Exports were 1.14 trillion yuan, down 6.6%. This is again putting pressure on the market. How to correctly view the situation of China's export and evaluate the competitiveness of China's manufacturing industry has become the focus of public opinion.
China's trade in goods remains the world's largest
"Foreign trade is trade between countries, which must be compared in the international context. Need from the quality and quantity and other multi-dimensional indicators comprehensive comparison." Foreign Trade Department of the Ministry of Commerce Deputy Director Zhi Luxun said.
From the international comparison, global trade last year of double-digit growth, China's export growth is still good global major economies and emerging market countries, fell far below the major trading partners and global trade, import and export trade of goods and exports are still first in the world, this also is the three consecutive years since 2013 to keep the position. China's share in global trade rose by one percentage point from 12.2 percent to more than 13 percent, the fastest increase in China's global share in a year.
In January, China's import and export of foreign trade still declined. However, it is important to note that imports and exports of all major economies in the world fell, and most of them fell by more than 10 percent. It should be said that from the perspective of global trade and economic development, China's foreign trade in January continued the momentum of 2015.
"We are used to high growth, we are not used to negative growth, we think negative growth is a problem. In fact, global trade was negative growth in 2015. Recently, the WTO released import and export data for 71 major economies in 2015. Exports fell by 11 percent and imports by 12.6 percent." Commerce Minister Gao Hucheng said. He believes that China's foreign trade in 2015 was still a satisfactory result. While global trade was growing, China's growth rate was higher than that of other major economies. While global trade has been falling, China's decline has been the lowest.
According to WTO statistics, 1 November 2015, the United States (6.8%), Germany (11.2%), Japan (9.4%), South Korea (7.4%), Hong Kong, China (3.1%), India (17.5%), South Africa (9.5%), Brazil (16.0%), and other countries and regions exports are negative growth, exports than I high 0.6 to 15% (2.5%) respectively. From January to November of 2015, China's import and export exceeded that of the US by US $56.6 billion, of which its export exceeded that of the US by US $667.2 billion. China continued to remain the largest trader in goods.
"In 2015, the Chinese economy contributed more than 25 percent to global economic growth. Despite the continued downturn in global trade, China's import and export are still significantly better than other major economies in the world. This in itself is an important contribution to world trade and the development of the global economy." "We should also adjust our thinking," Gao said. "China's foreign trade has indeed come to a stage where traditional industries need to improve quality and efficiency and new industries need to develop innovatively. There is also a speed shift, and this is also a hurdle we must overcome to improve quality and efficiency and innovative development."
The competitiveness of "Made in China" products has continued to increase
China's share of the world market continues to grow. This is a sign of weak global demand, not a lack of Chinese competitiveness. The influence of demand on export is usually cyclical, while the influence of the competitiveness of domestic export products on export is always trend. For a long time, export volume has received more attention than export competitiveness. But exports cannot answer the question of whether the slowdown in export growth is the result of short-term shocks such as reduced external demand or a long-term trend of weakening competitiveness, and it is difficult to adjust industrial and trade policies accordingly. So what are the other indicators of export competitiveness besides market share? Is the export competitiveness of Made in China continuing to improve?
Take a look at the numbers:
From the perspective of trade mode, China's general trade export maintained growth in 2015 and has become the main force driving export. In 2015, general trade exports reached US $1,217.3 billion, up 1.2 percent, accounting for 53.5 percent of foreign trade exports and 2.1 percentage points higher than the same period in 2014. Processing trade exports reached US $797.8 billion, down 9.8 percent, accounting for 35 percent of foreign trade exports and 2.7 percentage points lower than the same period in 2014.
In terms of main products, China's export of mechanical and electrical products maintained growth in 2015, and the product structure was further optimized. In 2015, the export of mechanical and electrical products reached US $1,311.93 billion, up 0.1% year on year, accounting for 57.6% of foreign trade exports and 1.8 percentage points higher than the same period in 2014. Among them, the export of mobile phones, ships and lamps increased by 8.5%, 13.3% and 15% respectively. Exports of seven categories of labor-intensive products, including textiles, clothing and shoes, totaled US $472 billion, down 2.7 percent year-on-year, accounting for 20.7 percent of foreign trade exports.
From the perspective of major markets, China's export market diversification has made progress, and exports to "One Belt And One Road" related countries have maintained growth. China's share in the United States, the euro zone, the United Kingdom and Japan remained stable. Exports to the United States grew by 3.4 percent and exports to ASEAN by 2.1 percent. Exports to India, Thailand and Vietnam increased by 7.4%, 11.7% and 3.8% respectively.
From the perspective of business entities, the export of private enterprises kept growing and became the main force of export. In 2015, private enterprises exported US $1,029.5 billion, up 1.8% year on year, accounting for 45.2 percent of foreign trade exports and 2.1 percentage points higher than the same period in 2014.
Shen Danyang, spokesman for the Ministry of Commerce, said China's foreign trade structural adjustment trend is improving, enterprises are more willing to transform and upgrade, and new drivers of foreign trade development are accumulating.
Bloomberg economist Shiyuan Chen also wrote that China's market share in many emerging economies increased in 2015, while it kept its market share in developed economies. China's exports are highly concentrated in manufacturing. China has maintained the competitiveness of its core products and its major manufactures have maintained their advantage over the rest of the world. And China's export composition has become more diversified and complex, providing a cushion against negative shocks.
According to the Economic Complexity Index, a measure of the diversity and sophistication of a country's exports compiled by Harvard University, China ranked 19th in the world in 2014, up from 39th in 2005 and 48th in 1995. China ranks higher than most emerging markets on this list. However, given that China still lags behind most developed economies, this means there is still room for further upgrading and diversification of its export basket.
The key to export competitiveness is industrial competitiveness
Production cost, trade cost, production efficiency and real exchange rate are the main factors that determine export competitiveness. What are the reasons for the continuous promotion of China's foreign trade competitiveness?
Minister of Commerce Gao Hucheng said: First, China's industrial system is very complete, with a long industrial chain and strong supporting capacity. Second, China has a strong capacity for innovation. Since the 2008 international financial crisis, Chinese enterprises have taken the initiative to adjust. Our investment in education, big to the country, small to the family is very big. In addition, the spirit of innovation is also a very strong competitiveness of China. Third, the development of emerging business forms, including the transformation of traditional industries and the innovation of emerging business forms. For example, Hangzhou's cross-border e-commerce pilot program increased exports by 10 billion US dollars in the same year. Fourth, the government has made great efforts to streamline administration and delegate power, sorted out various taxes and fees, and improved efficiency. We have created a convenient, efficient and law-based business environment for enterprises, and reduced their burden. We have made great efforts to solve the problem of financing difficulty and high cost for enterprises.
Of course, what needs to be seen is that the 30 years of rapid growth in China's foreign trade has gone forever. In the new period, China's foreign trade development is undergoing a series of new changes in terms of external demand, competitive advantage and trade structure. In the past, our comparative advantage and international competitiveness mainly depended on relatively low labor costs. But capital-intensive electromechanical and large equipment grew at a faster pace, indicating that the comparative advantage of China's manufacturing industry is shifting.
Bai Ming, a researcher at the Ministry of Commerce Research Institute, believes that the upgrading of foreign trade depends more on the upgrading of industries. This is a gradual process. It will not happen overnight. Breakthroughs have been made in the process of "going global" in China's high-speed rail and nuclear power projects, and the export competitiveness of Chinese-made goods is increasing. However, it should be noted that there is still a huge gap between its competitiveness and the standards of a trading power. In general, China's foreign trade development mode is changing, relying more on technology, brand, service and other comprehensive competitiveness to promote the export. We should not only vigorously develop and optimize the trade structure and develop e-commerce, but also continue to promote industrial upgrading in the light of the current mass entrepreneurship and innovation. Among them, clothing, fabrics and other labor-intensive industries also have great room for improvement.
In 2016, China's foreign trade was faced with a complex and severe domestic and international situation, and the downward pressure was still great. Economists generally predict that China's exports will continue to outpace the world this year, but the market for Chinese goods will grow only at a moderate pace because of global demand.
In this year's government work report, it is proposed to take solid steps to advance the Belt and Road Initiative, expand international cooperation on production capacity, and promote innovative development of foreign trade. All these will help improve the quality and efficiency of China's foreign trade and bring about a steady return to growth. We should base ourselves on the current situation, take a long-term view, and accelerate the transformation of the driving forces for foreign trade structural adjustment.
