Belt and Road initiative expands markets in Latin America, Africa
The continuing recovery of the global economy and a stable domestic economy have given a boost to the relatively fast growth of China’s foreign trade in the first quarter of 2018, although trade between China and the US underperformed.
China’s import-export value grew 9.4 percent year-on-year to 6.75 trillion yuan ($1.07 trillion) in the first three months of this year, with the trade surplus standing at 326.2 billion yuan, contracting 21.8 percent year-on-year, data from the General Administration of Customs (GAC) showed on Friday.
At a press briefing held in Beijing on Friday, GAC spokesperson Huang Songping attributed the growth to the modest global economic recovery, steady domestic economic expansion, supply-side structural reform and emerging markets along the Belt and Road routes.
A closer look at the data reveals that a more balanced economy is gradually taking shape in China.
Electromechanical products remained a pillar of exports, with some high value-added products doing well. Exports of automobiles and medical equipment grew by 10.9 percent and 8.4 percent respectively, signaling the emergence of new advantages in international competition.
Imports of crude oil and soybeans both increased during the first quarter. Imports of crude oil totaled 112 million tons, up 7 percent year-on-year and imports of soybeans rose 0.2 percent to 19.57 million tons.
The China-proposed Belt and Road initiative has enlarged the country’s markets, and trade with nations in Latin America and Africa increased 14 percent and 12.4 percent, respectively.
Sino-US trade tensions
Amid the US-China trade tensions, trade between the two countries underperformed in the first quarter of this year.
Over the same period, dollar-denominated imports from the US reached $41.67 billion, up 8.9 percent year on year, while exports to the US increased 14.8 percent year-on-year to nearly $100 billion. China’s trade surplus against the US was $58.25 billion, up 19.4 percent year-on-year.
China’s rising trade surplus with the US is a result of market factors that governments cannot control, Huo Jianguo, a senior research fellow at the Center for China and Globalization, told the Global Times on Friday.
"The US economy grew 2.9 percent in the first quarter. With US’ economic recovery, demand and purchasing power have increased, and orders from US companies have naturally followed this trend," Huo said, noting that rising US demand makes it difficult for China’s exports to register a decline.
"We never purposely seek a trade surplus. The current situation is ultimately decided by the two countries’ economic structures, industry competitiveness and the international division of labor," GAC’s Huang noted, adding that the trade surplus is in fact not that serious considering intermediary trade and trade in services.
The direct impact of US tariffs on China’s exports and economy is limited, according to a report Moody’s Investors Service sent to the Global Times on Friday.
"Trade has made a smaller contribution to China’s GDP growth in recent years and, combined with a changing trade structure, China’s direct vulnerability to potential trade shocks has declined," said Lillian Li, a Moody’s vice president, and author of the report.
Huo said to relieve the trade imbalance, the US should relax restrictions that prevent foreign manufactures from entering the country.
In 2018, China will "significantly" lower tariffs on vehicle imports and some other products, Chinese President Xi Jinping said at the opening ceremony of this year’s Boao Forum for Asia held from April 8 to Wednesday.
"Considering China’s cargo trade surplus and trade in services deficit, its measures to expand imports is for the purpose of balancing its current account instead of appeasing the US. This is also an opportunity that China’s economic growth brings to the world," Huo said.
In order to facilitate customs clearance and to lower institutional costs, the GAC has made efforts to streamline administrative procedures, according to Huang.
Huang said that China’s foreign trade still faces pressure from international political and economic uncertainties, rising trade protectionism and fiercer global manufacturing competition.
From Global Times，2018-4-14