Pulse on China’s Economy: High-quality trade, a main growth driver, helps stabilize the economy despite pressure

The 20th China-ASEAN Expo saw record num­bers of events, cooper­ation projects and investments. Nearly 2,000 businesses, up 18.2 per cent from 2022, showcased their products at the expo. High-tech products such as intelligent equipment became a highlight at the expo. Par­ticularly, Brunei’s decision to purchase 30 Chinese-made air­planes, namely C919 and ARJ21, for more than US$2 billion in total became the biggest deal in the expo’s 20-year history.


The bustling scene at the expo illuminates an emerging trend in China’s trade sector in recent months: Even as Chinese exports face a weakening exter­nal demand due to a wide range of factors including profound challenges and rising protec­tionism in advanced economies such as the US and Europe, China’s trade with emerging markets, including ASEAN and countries and regions partici­pating in the joint construction of the Belt and Road Initiative (BRI), continues to rise stead­ily. Meanwhile, high-value, high-quality Chinese products such as new-energy vehicles (NEVs) and construction equip­ment are becoming new growth spots.


While foreign media outlets have been hyping claims of “fall­ing” Chinese exports or allega­tions of Made-in-China being “replaced” by other countries and regions, China’s foreign trade remains resilient in the face of external and internal downward pressure, business­es and economists noted. And as exports remain one of the three growth engines of the Chinese economy, high-value, high-quality trade will contin­ue to help stabilize the world’s second-largest economy in the coming months and years, they noted.


Resilience in hardship

At the exhibition halls of the China-ASEAN Expo, vendors from ASEAN showed a palpable sense of confidence and interest in boosting trade with China, as they showcased various prod­ucts, which were emptied by vis­itors. While ASEAN exhibitors focused more on agricultural products and small commodi­ties, Chinese exhibitors focused on high-tech products such as NEVs and robots.


“The world is currently fac­ing an economic slowdown… ASEAN member countries are pinning their hopes on Chi­na,” Tan Sri Dato’ Low Kian Chuan, President of The As­sociated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), told the Global Times on Tuesday on the sidelines of the China-ASEAN Expo. “It can be seen from the trade volume that China-ASE­AN trade has surpassed the EU. We need China, and China also needs ASEAN. Bilateral coop­eration will definitely deepen.”


In the first eight months of 2023, China’s total imports and exports dropped by 0.1 per cent year-on-year to 27.08 tril­lion yuan, with exports growing by 0.8 per cent year-on-year to 15.47 trillion yuan, according to data from the General Ad­ministration of Customs (GAC). However, there were also plenty of emerging trends that point to the resilience and upgrade of China’s trade sector.


From January to August, China’s imports and exports with 152 countries that are participating in the joint con­struction of the China-proposed BRI grew by 3.6 per cent year-on-year to 12.62 trillion yuan, accounting for 46.6 per cent of China’s total foreign trade. Chi­na’s trade with ASEAN, which remains China’s biggest trading partner, grew by 1.6 per cent year-on-year to 4.11 trillion, accounting for 15.2 per cent of China’s total trade. The fall in China’s overall trade during the period is largely due to declines in exports to the EU, the US and Japan, which all face stubbornly high levels of inflation.


In terms of top export prod­ucts, demand for Chinese-made mechanical and electrical prod­ucts remained high, as exports during the first eight months increased 3.6 per cent year-on-year. Exports of cars, including NEVs, skyrocketed by 104.4 per cent year-on-year. China’s car exports have made headlines around the globe, with many foreign media outlets predicting that China is set to overtake Japan as the world’s biggest car exporter in 2023.


A slew of advanced tech­nology exhibits was unveiled at the China-ASEAN Expo. The exhibits cover a wide range of products, spanning aerospace, advanced manufacturing, sus­tainable development, and digi­tal advanced applicable technol­ogies, offering the audience a glimpse of life in the future. The advanced tech exhibition area covers an area of 3,400 square metres, with a total of 124 exhib­itors and 345 exhibiting projects on display.


Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing, said Chi­nese products still maintain a solid competitive edge even though Chinese exports face challenges such as US’ addi­tional tariffs. Gao noted the challenges will be relatively short-term against the back­drop of the trade competition between China and the US.


“The core factor affect­ing China’s trade, namely the competitiveness of Chinese products, has not undergone major changes,” Gao told the Global Times, adding that while the role of exports as a major economic engine is decreas­ing due to the rise of Chinese consumption, China’s foreign trade still has a vast potential for development.


High-quality development

New trends in China’s for­eign trade also underscored high-quality development, in which more markets have been explored and more Chi­nese-made high-tech products are getting increasingly popular around the world, analysts not­ed, stressing that an increas­ingly optimized trade structure that focuses on emerging mar­kets and industries is more sus­tainable in the long run.


Zhou Mi, a senior research fellow with the Chinese Acade­my of International Trade and Economic Cooperation, said that one of the biggest high­lights of China’s foreign trade is that the trade volume with countries participating in the BRI is rising sharply, which in turn lifts local economic de­velopments and thus demand. In terms of product offerings, China’s exports sector has re­sponded swiftly to demand for the digital economy, green de­velopment and other new con­sumption trends.


“To gauge the global influ­ence of one country’s exports, we still need to see whether it can meet the needs of global economic and industrial up­grading, so the quality of ex­ports needs more attention. China’s exports are still recov­ering, and this recovery is not only reflected in the quantity,” Zhou told the Global Times. “We cannot just focus on increasing the scale of exports, we also need to improve the quality.”


Amid the rapidly shifting global geo-economic land­scape and the domestic indus­trial upgrade, China has made high-quality development in foreign trade one of its top pri­orities, and has taken a slew of measures in this regard. In April, the Ministry of Commerce introduced a series of policies to stabilize the scale of foreign trade and improve its structure, including helping automakers establish and improve their in­ternational marketing and ser­vice systems, and improving foreign trade financing services for medium, small and micro enterprises. These measures have greatly helped boost rel­evant sectors such as soaring NEV exports.


Another highlight of China’s foreign trade sectors this year is surging exports by private enterprises. In the first eight months, total exports value by private enterprises rose by 6 per cent to 14.33 trillion yuan, accounting for 52.9 per cent of the national total, according to the GAC.


The measures, which also include extensively resuming domestic offline exhibitions, will continue to help enterprises ex­plore more markets. China has held a series of trade fairs this year, including the China-ASE­AN Expo and the China Inter­national Fair for Trade in Ser­vices earlier this month. More are under planning, including the China International Import Expo scheduled later this year in Shanghai, which has become a major event for global trade cooperation that focuses on imports.


“I have confidence in Chi­na. I believe that China has the conditions and capabilities. Moreover, China is not just the world’s largest factory. It can make breakthroughs and cope with the current challenges through its own technological innovation,” Low said.


Source: Chinese Embassy