New Normal Of Foreign Trade: New Drive And New Balance

At present, China's economy is facing many uncertain factors, such as imbalance in overseas economic development, falling commodity prices and strong US dollar.

In December 8th, the latest figures released by the General Administration of Customs showed that in November of this year, the total value of China's imports and exports was 23 trillion and 950 billion yuan, an increase of 2.2% over the same period last year, and the growth rate of imports and exports in November was not as good as expected.

The 11 Session of the central economic work conference held that from the point of view of exports and balance of payments, the expansion of international market space was very fast before the onset of the international financial crisis, and export became an important kinetic energy to stimulate the rapid development of China's economy. Now the global demand is sluggish, and the low cost comparative advantage of China has also been pformed. At the same time, China's export competitive advantage still exists. High level import and large-scale going out are happening simultaneously, so we must intensify the cultivation of new comparative advantages, so that exports can continue to play a supporting role in economic development.

Analysts interviewed by the twenty-first Century economic report said that many challenges facing China under the new normal are not conducive to the development of foreign trade in the short term, but a mechanism may be formed in the long run.

In addition, the strategy of "one belt and one road" and free trade zone strategy are expected to become the new growth point of foreign trade next step.

New normal challenge

At present, the global economy is in an unbalanced state, emerging markets are beginning to split up, the US dollar is strong and commodity prices are falling, and so on. China's economy is facing increasingly complicated and changeable international situation.

From the published data, the United States is one of the few countries that still maintain the bright spot of economic development. Japan's economy in the third quarter fell by 1.9% compared to the same period last year, and has yet to show growth momentum. The EU economy has maintained growth for the six consecutive quarter, but the economic recovery is still fragile and the recovery process is relatively slow.

The recession in overseas markets has directly affected the export of one of the "three carriages" of China's economy. Data show that in the first 11 months of this year, the total export value of China's imports and exports reached 13 trillion yuan, an increase of 4.4% over the same period last year.

Because of the strong US economy, the US dollar has also maintained a relatively strong position, which has an impact on the nominal growth rate of China's imports and exports.

Zhou Shijian, senior researcher at the Sino US relations research center of Tsinghua University, believes that the renminbi is also upgrading when the US dollar remains strong against the rest of the currency, which has seen significant fluctuations in recent years, and in fact has a greater impact on foreign trade enterprises.

Data show that in December 10th, the central parity of the RMB against the US dollar has broken through the 6.12 pass, hitting a new high since March 3rd this year.

In addition, the strength of the US dollar has led to the depreciation of the currencies of the major emerging economies, and the withdrawal of QE and other factors. The US dollar has returned from some developing countries, making the emerging economies obviously affected by the slowdown in the global economy.

Li Jian, director of the Institute of foreign trade research of the Ministry of Commerce, told the twenty-first Century economic report that the emergence of factors such as the decline in commodity prices reflected the slowdown in world economic growth and the downturn in demand. China may encounter a relatively slow growth in the world economy in the medium term, coupled with the weakening of its traditional strengths and the entry of competition from Southeast Asian countries. The challenges faced by foreign trade are more severe. In the medium term, it will be a trend of growth at medium and low speed.

However, the downturn in the international market has also brought some new opportunities for the Chinese economy. Zhang Jianping, director of the International Cooperation Office of the Foreign Economic Research Institute of the national development and Reform Commission, believes that, due to the decline in the prices of bulk commodities, the number of Chinese imports has increased, reflecting a decrease in the amount, but this is conducive to the implementation of China's import strategy.

Zhang Yongjun, deputy director of the Department of economic research, China International Economic Exchange Center, told reporters on twenty-first Century economic report that the current situation is a disadvantageous situation in the short term, but in the long run, a forced mechanism may be formed.

In addition, the decline in international commodity prices has some advantages for China to make more use of international market resources.

China's foreign trade situation report released by the Ministry of Commerce (autumn 2014) pointed out that the challenges faced by China's foreign trade development in 2015 were highlighted in the following aspects:

It is difficult to recover obviously, and the pformation of China's foreign trade competitive advantage is out of date, and the situation of trade friction is still grim and complicated.

Experts interviewed by reporters believe that the strategy of "one belt and one road" and free trade zone, which the country is actively promoting, will become a new driving factor for China's foreign trade.

It is believed that the gradual promotion and implementation of the "one belt and one way" will play a relatively good role in promoting China's foreign trade export and import. For domestic purposes, in order to cooperate with the implementation of the strategy of "one belt and one road", some supporting construction and corresponding reform will be carried out, which will reduce the cost of import and export.

The implementation of the FTA will reduce the tariff level, reduce barriers to trade and investment, and help to enhance economic and trade relations with related countries and regions.

Zhang Xiangchen, Assistant Minister of Commerce, also said recently that with the construction of "one belt and one road", the surrounding recipient countries have put forward a series of aid requests to the Chinese strategy. The Ministry of Commerce will expand the scale of aid according to the actual capabilities and the needs of the other side.

The meeting of the Political Bureau held in December 5th also called for the release of the potential of domestic demand, the balance of imports and exports, the introduction of foreign investment and the balance of foreign investment, and the gradual realization of the basic balance of international payments.

The central economic work conference also suggested that we must more actively promote domestic demand and external demand balance, import and export balance, import foreign investment and foreign investment balance, gradually realize the basic balance of international payments, and build a new open economy system.

We should improve the policy of expanding exports and increasing imports, consolidate the export market share, improve the investment environment, stabilize the scale and speed of foreign investment, improve the quality of attracting foreign investment, and strive to improve the efficiency and quality of foreign investment.

The reporter understands that the balance of imports and exports involves various factors, such as interest rate and exchange rate. At present, the general office of the State Council has issued some opinions on strengthening imports, which calls for the implementation of an active import promotion strategy, strengthening the import of technology, products and services, promoting the balance of payments, and enhancing the level of open cooperation.

According to Zhang Xiangchen, according to the 10% estimate, the amount of foreign direct investment in China will reach about 120 billion this year, and the amount of foreign investment exceeds the amount of attracting foreign investment, which is only a matter of time.

According to Li Jian, there are still some domestic needs in the country. From the point of view of foreign trade, one example is that there is still demand for high-quality goods in the international market. However, due to higher import prices or some regulatory reasons, this demand is depressed.

Zhang Yongjun predicted that the long term "double surplus" situation will change in the past. On the one hand, China's commodity output growth slowed down, the growth rate was not as fast as before, and capital output in the next few years showed a general trend of expansion. In this case, capital output will play a leading role in the export of commercial products, and the pattern of international payments will also change.

This is also a process of digestion for China's previously accumulated foreign exchange reserves.

Gao Hucheng said that the next step will be a qualitative change in China's foreign trade exports.

As China has reached the era of capital export, China's foreign investment will be closely integrated with China's foreign trade. In the strategic concept and complementarity of the "one belt and one road" strategy, the export of commodities has already been exported, including consumption and investment capital, and this trend is becoming more and more obvious.