Ministry of Commerce: China's foreign trade may encounter huge pressure next year

Edited by Zhong Mengxia

Few days ago, the State Council Information Office held a press conference to invite Wang Wentao, Minister of Commerce, Wang Shouwen, Vice Minister and Deputy Representative for international trade negotiations, and Qian Keming, vice minister of Commerce, to introduce the situation of actively contributing commercial forces and striving to boost the well-off society in an all-round way.

Foreign trade is one of the "three wagons" driving the economy. It contributes a lot to employment and tax revenue in China and plays an important role in the process of building a moderately prosperous society in all respects. The current global trade market is quite complicated. At the conference, a journalist asked the Ministry of Commerce how they think about the prospect of China's foreign trade development and what other policies and measures they will introduce.

Wang Wentao, Ministry of Commerce answered the question by listing a series of data. First, foreign trade promotes the steady development of China's economy. As of 2020, China's foreign trade has reached 4.6 trillion US dollars, with China's international market share accounting for 14.7 percent, hitting a record high. At the same time, China contributed 28% to economic growth. Second, foreign trade has enriched domestic market supply. Except that President Xi Jinping promoted the China International Import Expo (hereinafter referred as CIIT) worldwide, also, we expend import, making import goods access to supermarkets and thousands of households, to provide consumers with more choices. Third, the foreign trade industry has expanded employment and tax revenue to our country, creating about 180 million jobs to public.

Since the 18th National Congress of the Communist Party of China, foreign trade has contributed 11% of total fiscal revenue and maintained foreign exchange reserves at around USD 3 trillion. We used to be the world's largest trader in goods. Foreign trade has effectively guaranteed the balance of international payments for us. Last year, we became the world's largest trader in goods and services.

For the first 7 months, forgien trade have maintained the momentum of rapid growth with 24.5% per cent of increasing speed, reached a new high during ten years. There are some one-off factors affecting trade market. The pandemic has intensified in neighboring countries for the past few months. However, as the pandemic is well managed by the governments, these orders will be probably returned in next few months. At the beginning of the pandemic world wide, China's exports of masks, protective suits and ventilators surged, but now there has been a significant decline, indicating that these one-off advantages to us are gradually disappeared. We have seen a gradual slowdown in foreign trade growth in the second half of the year, and next year is likely to be tough. Our foreign trade began to recover in the second half of last year from a relatively high base. But this can't last that long. Wang hoped that the pace and speed of recovery is a step-by-step process, and its growth can be within a reasonable range. At the macro level, strengthen cross-cycle adjustment to ensure that the economic fluctuations is within an appropriate range and prevent drastic ups and downs from harming economic growth and market entities. In the second half of 2021, the Ministry of Commerce will focus on cross-cycle adjustment. To be specific, it can be concluded to stabilize growth, promote innovation, ensure open and expand cooperation, four aspects.

Steady growth, which mainly refers to stabilize the main economy and orders. At present, we still face some difficulties, which are common to encounter, such as the impact of transport capacity and rising freight rates, the rising price of commodity goods and raw materials, the pressure of RMB exchange rate appreciation, and the rise of labor costs. These are the four difficulties facing foreign trade enterprises, especially small and medium-sized enterprises. We will adopt a series of measures to stabilize market entities and orders.

Promote innovation. In addition to traditional foreign trade, we still actively introduce new modes and methods to promote export and import, such as crossborder e-commerce. Also, we are commiting to supportting the export of high-technology, high-quality, and high value added products and Chinese global brand builders.

Ensure open and inclusive to keep our foreign supply chain and industry chain smoothly.

Last but no least, expand cooperation, also is one of our prospects of future. Keeping forward to cooperate with international and diverse sectors, protect multilateral trade, making our enterprises integate into the whole international economic cooperation work, which not only makes contributions to world development, but also greatly improves our own foreign trade.