Better than expected foreign trade in October: long term pressure to stabilize foreign trade in the short term remains

category:Finance
 Better than expected foreign trade in October: long term pressure to stabilize foreign trade in the short term remains


In October, Chinas total import and export value reached 2.71 trillion yuan, down 0.5%. Among them, the export was 1.51 trillion yuan, up 2.1%; the import was 1.2 trillion yuan, down 3.5%; and the trade surplus was 301.28 billion yuan, up 33%.

Compared with September, exports in October turned positive, and the decline in imports also narrowed. However, Bai Ming, deputy director of the International Market Research Institute of the Ministry of Commerce, stressed that although there are signs of short-term stability in the growth rate of Chinas foreign trade, in absolute terms, Octobers foreign trade is still in a relatively low range, which should not be too optimistic at present.

International Economic and trade environment or marginal improvement

Bai Ming told the 21st century economic report that in terms of the growth rate of import and export, foreign trade in October was slightly better than expected, export growth turned from negative last month to weak positive growth, import decline also narrowed, and foreign trade gradually showed signs of stabilizing.

In his opinion, the growth rate of short-term foreign trade may be greatly affected by the base and exchange rate. On the one hand, due to the upgrading of trade frictions between China and the United States and other factors, the base is relatively low, which may increase the year-on-year growth rate in October. On the other hand, in recent years, the RMB has depreciated relative to the U.S. dollar, which will boost foreign trade exports and increase the growth rate of RMB denominated foreign trade.

Secondly, in the past year, China has implemented a series of measures to stabilize foreign trade in terms of increasing export tax rebate and reducing system cost, and its policy effect is gradually emerging.

In addition, since mid to late October, China US economic and trade consultation has been actively promoted. The two sides agreed to properly address their core concerns. A better trade environment will support exports to some extent. At the same time, China is also adjusting the structure of the international market. China, the EU and ASEAN trade partners still maintain a good growth rate, which has become an important pillar to support the steady development of Chinas foreign trade.

Statistics show that in the first half of October, trade between China and Europe totaled 3 trillion and 980 billion yuan, an increase of 8.3%, accounting for 15.5% of Chinas total foreign trade; total trade between China and ASEAN was 3 trillion and 540 billion yuan, an increase of 11.9%, accounting for 13.8% of our total foreign trade; Chinas total imports and exports to the countries along the belt and road increased by 9.4% yuan, up by 7 percentage points from the whole country, accounting for 29.1% percent of the total value of our foreign trade. 1.9 percentage points higher.

Liu Jian, research director of the research center of the Bank of communications Gold Research Center, told the 21st century economic report that the short-term economic data such as PMI of the United States and the euro area stabilized in October, and the economic boom picked up. The improvement of foreign demand is conducive to the stability of Chinas foreign trade.

Qin Tai, senior Macro Analyst of Shenwan Hongyuan, pointed out that in terms of US dollar, Chinas exports to the United States (- 16.2%) in October rose 5.7 percentage points compared with September; exports to Africa and the United States rebounded to 3.0% overall despite the high base, up 1.3 percentage points compared with September, among which the growth rate of EU (3.1%), ASEAN (15.8%) and South Korea (5.5%) has improved, which shows the recent external environment The situation has eased.

In his view, due to the impact of global monetary policy easing, there are signs of stabilization of external demand in the fourth quarter, and the year-on-year export is expected to fluctuate narrowly around 0; the domestic monetary environment is somewhat relaxed, and it is expected that the import growth rate in the fourth quarter will start to turn into a warmer stage in the bottom range.

Adjustment of Chinas import structure

Imports performed better than expected. In the first 10 months, imports of crude oil, coal, natural gas and other commodities increased, including 415 million tons of crude oil, 276 million tons of coal, 77.71 million tons of natural gas, 7.9% and 30.09 million tons of plastic in primary shape, 10.3% respectively.

Bai Ming believes that the narrowing of the decline in imports may indicate that Chinas domestic economy is gradually stabilizing. On the one hand, the import of bulk commodities is closely related to domestic industrial production, and the increase of import often means the improvement of demand; on the other hand, with the increase of national income, the increase of purchasing power and the continuation of consumption upgrading trend, the import of consumer goods will provide more powerful support for import.

In fact, the Expo in Shanghai can reflect this trend. There are seven exhibition areas in the Expo, including equipment, quality life, medical equipment and health care, science and technology life, food and agricultural products, service trade and automobile.

Wang Zhe, Secretary of the Party committee of Suning holding group and head of Suning purchasing and trading group, told the 21st century economic report at the fair that after the first fair, imported overseas goods continued to be hot sold on its platform. In the first October of this year, Sunings overseas brand sales growth rate remained above 200%, which is one of the fastest-growing businesses in all commodity categories.

In the first half of the year, Suning went to Thailand to buy 20 million durian, 20 million jins of mangosteen and 20 million Yeqing, contracted 30000 mu of huolongguo plantation in Vietnam, and jointly sold more than 10000 intelligent juice machines with NUC electronics in South Korea. Wang Zhe said that the expansion of imports conforms to the trend of domestic consumption upgrading, better meets the needs of peoples better life, and will continue to release greater market potential.

Bai Ming said that Chinas import structure is undergoing subtle but profound adjustments. In the past, it was said that imports were purchases of means of production on the supply side and then used for investment and production. For a long time, bulk commodities accounted for a large proportion of imports. At that time, there was no way. There was little foreign exchange. Good steel should be used on the cutting edge, and raw materials and other means of production became the main force of imports. But now the situation is totally different.

He pointed out that on the one hand, in terms of the import of means of production, Chinas manufacturing industry is undergoing rapid transformation and upgrading, not limited to the import of raw materials, and the import of key technologies and complete sets of equipment has become an important part of Chinas supply side structural reform. On the other hand, with the improvement of living standards and the increase of disposable income, China is moving from food and clothing consumption to consumption Diversified consumption and the proportion of imports of living materials are also rising rapidly.

Huang Qifan, vice president of China International Economic Exchange Center, pointed out at the fair that China is actively reducing import tariffs and moving from an export-oriented trade model to a balanced one that encourages both exports and imports.

He said that Chinas average tariff rate was about 45% in the 1990s. After Chinas accession to the WTO, the tariff rate dropped to 15.5%, to 9.7% in 2010, to 7.5% in 2018, and now to 6.7%.

In my own opinion, within five years, our tariff will be further reduced to 2% - 3%, close to zero tariff level. He believes that at that time, the phenomenon of overseas shopping that the Chinese carry back $150 billion of goods every year when they travel overseas will be replaced by normal imports.

Source: responsible editor of 21st century economic report: Yang qian_nf4425