Stabilize Foreign Trade and Investment and Promote Consumption

By Ada Wang

During the first half of the year， Chinas total foreign trade in goods amounted to RMB 19.8 trillion， up by 9.4%； the total retail sales of consumer goods reached RMB 21 trillion， with the growth rate turning positive from negative in June； and the actually utilized foreign capital reached RMB 723.31 billion， up by 17.4%.

On July 29， the Ministry of Commerce held a press conference on “commercial work and operation conditions in the first half of the year of 2022”， pointing out that， when faced with multiple challenges and uncertainties， it is necessary to work hard to stabilize foreign trade and investment and promote consumption in the second half of the year.

Stabilize foreign trade from three aspects

When looking back at the trade performance of the first half of the year， Zhang Bin， Deputy Director of the Foreign Trade Department of the Ministry of Commerce， said that Chinas foreign trade has been playing an important role in stabilizing the macroeconomy， stabilizing employment and ensuring peoples livelihoods. In the first half of this year， the net exports of goods and services led to an economic growth of 0.9 percentage points， with a contribution rate of 35.8%； it has seen the new registration of 88，000 new foreign trade operators， most of which are small and micro foreign trade firms.

Regarding the foreign trade situation in the second half of the year， Zhang Bin explained that at present， foreign trade faces many uncertainties， the risk of stagflation of the world economy has increased significantly， many major economies are continuing to raise interest rates， and the prospects for trade growth are not optimistic. Furthermore， the logistics efficiency both at home and across the world still requires improvement. In the second half of the year， multiple measures should be taken to stabilize foreign trade in three aspects：

Expanding trade volume. The role of export credit insurance in supporting foreign trade should be enhanced， fully tapping into the potential of cross-border e-commerce and further cultivating comprehensive pilot zones for crossborder e-commerce. The signed free trade agreement can be put to good use to guide enterprises to accurately explore the international market. Exhibitions such as the China International Import Expo and the Canton Fair can be used to encourage enterprises to grab orders through various channels. The export of high-tech and large-scale complete sets of equipment with a high value will be supported and the key projects of the Belt and Road will be jointly built.

Stabilize the trade scale. After more closely following and studying the trade situation， it will be possible to implement policies and measures to promote the stability and quality of foreign trade. The guarantee for the production and operation of foreign trade enterprises will be strengthened， logistics congestion points will be unblocked in a timely manner， and the standardization of port charges will be promoted. The stable development of processing trade will also be supported， giving play to the role of processing trade industrial parks and undertaking sites， and guiding the orderly transfer of the processing trade towards the central and western regions and Northeast China.

Enhance support. All local governments will be encouraged to increase their efforts to stabilize foreign trade， stabilize the expectations of small， medium-sized and micro foreign trade enterprises， and help them reduce costs. the coordination and cooperation with the relevant departments will be strengthened to form a joint force for stabilizing foreign trade. Trade promotion measures must be worked out， expanding imports and ensuring the supply of bulk commodities for domestic needs. More national import trade promotion and innovation demonstration zones will also be cultivated.

Attract more multinational companies to invest in China

The performance of foreign investment attraction for the first half of the year also came out on the day of the press conference. The 17.4% growth of inbound investment shows Chinas market attraction. In particular， foreign investments in the manufacturing and high-tech industries have increased by 54.8% and 33.6% respectively.

Chen Chunjiang， Director of the Department of Foreign Investment of the Ministry of Commerce， said that China has effectively coordinated pandemic control and economic and social development. The economy is stable and will rebound. Multinational enterprises will experience a good investment environment and abundant opportunities in the Chinese market.

“We will organize local tours for multinational enterprises and let them visit the central and western regions and Northeast China，” said Chen Chunjiang，explaining that industrial chain investment attraction will be carried out to introduce a number of new projects. “We will continue to give full play to the role of foreign investment working groups， and enhance regular communications with foreign-funded companies and foreign business associations. We will also improve the dynamic update mechanism of the list of key foreign-funded projects， and launch a new batch of national key foreign-funded projects.”

The data shows that high-level opening up platforms play a significant role in attracting foreign investment. In the first half of this year， the actual use of foreign capital in 21 pilot free trade zones increased by 16.8%， and the attracted foreign capital in the service industry in the “1+4” trial pilot areas for the expanded opening of the service industry increased by 15%， and the foreign capital attracted across 230 national economic development zones increased by 42.1%， accounting for 19.6%.

Chen Chunjiang also predicted that in the second half of the year， it will be necessary to build more comprehensive pilot zones for the expansion and opening-up of the service industry， to introduce more policy measures to promote the reform and innovation of the service industry， to replicate and promote a new batch of pilot results， and to advance the institutional opening-up of the service industry.

The key work of stabilizing foreign investment in the second half of the year is to launch new policies and measures to stabilize foreign investment and continuously optimize the business environment.

Chen Chunjiang said that special policies such as the Catalog of Industries of Encourage Foreign Investment and the Measures for Strategic Investment by Foreign Investors Upon Listed Companies will be revised and promulgated soon. It is important to work with the standing committee of the National Peoples Congress to carry out the enforcement inspection of foreign investment law， and to urge all parties to comprehensively and thoroughly implement the foreign investment law and its implementation regulations； the 2022 version of Chinas foreign investment guidelines has been issued to better facilitate foreign investment. It is also important to guide all local governments to make good use of the complaint mechanism for foreign-funded enterprises and to better secure the foreign investment.

Multiple measures to promote the continuous recovery of consumption

Yang Tao， Deputy Director of the General Affairs Department of the Ministry of Commerce， said at the press conference that in the first half of the year， the total retail sales of consumer goods in China reached RMB 21 trillion， a year-onyear decrease of 0.7%. It is possible to see that the impact of the pandemic was serious in April， causing the growth rate to fall to-11.1%. The grow rate returned to -6.7% and then 3.1% in May and June respectively.

An Baojun， Deputy Director of the consumption promotion department of the Ministry of Commerce， highlighted the fact that that Chinas consumer market has experienced three stages of development： a stable start， downward pressure and gradual recovery. Affected by the pandemic， the total retail sales of consumer goods saw negative growth in March， April and May. As the pandemic was well controlled and economic stabilization policies kicked in， the consumer market has shown positive recovery recently. In June， the total social retail sales increased by 3.1% year-onyear， changing from negative to positive.

An Baojun also emphasized that the basis for consumption recovery is still unstable， and we still require more effort to promote the sustainable recovery of consumption.

Regarding how to promote consumption in the second half of the year， An Baojun said that the Ministry of Commerce will firmly implement the strategy of expanding domestic demand， effectively coordinate pandemic control and consumption promotion， and take multiple measures to promote the sustained recovery of consumption. The focus shall be placed on four aspects：

The first is to implement policies to promote the recovery of consumption. A series of policies and measures that have been introduced to stabilize the economy and promote consumption will be conscientiously implemented， the consumption of automobiles， green and smart home appliances will be further expanded， and local governments will be pushed to introduce supporting measures taking local real conditions into account. The purpose of this is to ensure that all policies are implemented well and achieve the improvement in consumption.

Second， the focus should turn to innovation and stimulate consumption vitality. It is important to accelerate the healthy and orderly development of new business formats and models such as livestreaming e-commerce and social e-commerce， and to expand new digital services for the improvement of daily lives.

The third is to optimize the platform mechanism and improve the consumption level. In cities， the cultivation and construction of international consumption center cities should be accelerated by promoting the high-quality development of pedestrian streets， building more smart business districts and smart stores for demonstration purposes to speed up the construction of a quarter-hour convenient life circle， and promoting the upgrading of urban consumption. In rural areas， the construction of a county commercial system should be sped up， and it is necessary to improve and optimize county consumption channels， upgrade the three-level logistics distribution system that covers counties， towns and villages， accelerate the development of cold chain logistics， and make up for the weaknesses of rural consumption.

The fourth is to organize activities and invigorate the consumption atmosphere. Under the premise of strict pandemic prevention and control， key consumption promotion activities such as the international consumption season， the Chinese food fair， and the timehonored brand carnival will be organized and carried out. At the end of this month， the “International Consumption Season 2022” will launch in Shanghai. At the same time， all regions will be guided to organize and carry out various consumption promotion activities in combination with local consumption and festival characteristics， so as to further boost consumption confidence and release the consumption potential.

“Generally speaking， with the pandemic gradually coming under control and the effective implementation of various consumption promotion policies， consumption is expected to continuously recover and achieve positive growth in the second half of the year，” An Baojun said.