How Can China Develop The Development Potential Under The New Normal Trade?

China

It is impossible to perpetuate the trend of the past hurricane. Although we should pay attention to the temporary negative growth, there is no need to over interpret it. From the enterprise to the government, China is actually casting new advantages of the open economy. Upgrading, innovation and efficiency are increasingly becoming the main theme of China's foreign trade. China's foreign trade will continue to be an important locomotive for China's economic and social development.

On the basis of the new advantages and new strategies of open economic competition, how can China develop the development potential under the new normal situation of foreign trade?

The most important innovation is the innovation of management system. Its task is to simplify administration and decentralization, and create a good environment for the development of our industry and foreign trade.

The second is foreign trade.

Innovation.

Third, we must continue to push forward the pformation and upgrading of the trade mode. On the one hand, its contents will continue to promote the pformation and upgrading of processing trade to general trade and processing trade itself, and on the other hand, the upgrading of technological tools.

It is believed that this year will become the "fast forward", "breakthrough year" and "bumper harvest year" of innovation, pformation and Reform in the field of foreign trade.

Has China's foreign trade been ill? Has China's foreign trade been hindrance from the "locomotive" of economic growth? Witnessed the rare negative growth of China's foreign trade in 2015 and the first two months of 2016, which has aroused widespread concern from domestic and international economic circles to the public.

In the wave of "singing empty China" which appeared on several occasions, the shrinking of China's foreign trade export has also become an important "basis" for singing empty people.

However, if we take a closer look at China's foreign trade, we can realize that China's foreign trade has never been able to perpetuate the past, and we must pay attention to the temporary negative growth, but there is no need to over interpret it. From the enterprise to the government, China is actually casting new advantages of the open economy. Upgrading, innovation and efficiency are increasingly becoming the main theme of China's foreign trade, and China's foreign trade will continue to be an important locomotive for China's economic and social development.

Face up to China's foreign trade pressure

Sustained high growth in foreign trade has made an irreplaceable contribution to China's industrial and economic growth.

If China's economy is the number one top student in the world economy since the reform and opening up, foreign trade is the best performance of this top student. If China's economic growth is the biggest story of poverty alleviation in the world, then foreign trade is one of the most important contributors to this great story.

In this process, China has become the world's largest exporter of trade in goods, and is relying on an increase of more than GDP. China's foreign trade has greatly increased its dependence on foreign trade.

However, since 2012, this has begun to change.

There is no need to avoid the pressure on China's foreign trade. This kind of difficulty may be something that has not been seen since reform and opening up. The growth rate of foreign trade is lower than that of GDP, or even a negative growth.

Moreover, the increasing pressure of being overtaken will further increase our foreign trade.

Most intuitively, due to the rising cost of labor and land, the traditional labor-intensive industries such as textiles, clothing, footwear, furniture, bags, toys and so on are facing increasing pressure of "being overtaken" at the beginning of our reform and opening up. If we can not solve the problem, we will never be able to repeat the failure of the labor intensive industries such as the United States and Japan, and even the India textile industry is out of line in all aspects of production and market.

Even mechanical and electrical products, which already occupy half of China's exports, are also facing severe pressure.

In the larger context, "catching up" or being overtaken is increasingly becoming a challenge for China's economy.

Today, China is already the world's largest trading power and number one manufacturing power. It is the only country in the world that has all the industrial categories of the United Nations.

China's equipment manufacturing industry accounted for 1/3 of the world's output in 2013.

However, whether China can continue to develop further, and the future of China's fate is whether it is Jackie Chan or the stagnation of development.

Looking back on history, there are many countries that have experienced economic take-off.

In the low income countries defined by the world bank in 1970s, more than 40 years later, a total of only 4 countries entered the world bank defined high income class, and 3 of these 4 countries were small island countries. Therefore, they are not representative, only a South Korean country has certain representativeness.

Whether the Chinese economy is "catching up" or "being overtaken" is the key to the impact of the surrender of foreign trade.

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There is no need to overread the temporary negative growth of China's foreign trade.

Nevertheless, if we look closely at the growth trend of global foreign trade and the qualitative changes that have taken place in China's foreign trade, it is easy for rational market participants and observers to understand that the slowdown in foreign trade growth and the temporary negative growth have not reduced China's share and status in the international trading system. There are also bright spots in the temporary difficulties.

First of all, price changes exaggerate the degree of growth and decline in China's foreign trade since 2013.

The main body of China's export is manufactured goods.

During the period from 1997 to 2013, the price of international trade manufactured goods in dollar terms rose overall, with an average annual increase of 0.3% from 1997 to 2006. The 2007 to 2012 increase was 5.7%, 6.2%, -5.6% (sub prime mortgage crisis), 2.4%, 6.4% and 0.5% respectively.

However, from 2013, the price of international trade manufactured goods in dollar denominated went down, and the decrease in 2013 to 2015 was -1.1% and -0.6% respectively (the price index of China's export commodities decreased by 0.7%) and -4.1%.

As GDP growth is calculated at constant prices, the import and export volume of trade in goods is calculated at actual prices. Price changes actually exaggerate the extent of China's foreign trade export growth lagging behind GDP growth in recent years, and even exaggerate the extent of China's foreign trade export shrinking in the first two months of 2015 and 2016.

Secondly, due to the change of growth base, the increment of smaller foreign trade now is equivalent to the super high speed increment in the past.

10 years ago, the growth rate of China's foreign trade export was 20%, and the annual export increment was about 40 billion US dollars, which is only 2% of the current export increment.

Therefore, in 2016, the "government work report" of the two sessions of the two countries did not mention the index of foreign trade growth, but positioned itself as "stabilizing to the good". The weight of this "stable" word is actually not light. Even if the export growth is only 1% to 2%, the increment of foreign trade is equivalent to the performance of the super high speed growth period in the past.

Third, China's trade surplus continues to expand.

In 2014, China's export volume increased by less than GDP, but the trade surplus was 382 billion 460 million US dollars, an increase of 47.3% over the same period last year.

The trade surplus in 2015 was 3 trillion and 690 billion yuan, an increase of 56.7% over the same period last year.

In the face of the sharp decline in economic growth and the sharp rise in capital outflow pressure, the trade surplus that has grown substantially for two years has not only effectively supported the entire economic growth, but also played an irreplaceable role in stabilizing the RMB exchange rate and the expectations of market participants.

Compared with many other emerging market economies whose exchange rate has collapsed in recent years, the significance of China's trade surplus continues to expand.

Fourth, China's foreign trade structure is still upgrading and improving, and the macroeconomic benefits of foreign trade have been continuously improved.

In 2014, China's general trade import and export amounted to 2 trillion and 310 billion US dollars, an increase of 5.3%, accounting for 53.8% of the total import and export volume of the whole country, an increase of 1 percentage points over 2013.

In 2015, China's general trade import and export volume was 13 trillion and 290 billion yuan, down 6.5%, accounting for 54% of imports and exports, an increase of 0.3 percentage points over the previous year, and the proportion increased for third consecutive years.

In those days, China exported 8 trillion and 150 billion yuan of mechanical and electrical products, an increase of 1.2%, accounting for 57.7% of the total value of exports, up 1.7 percentage points from the previous year (2014).

Fifth, the global economy has entered a period of low growth. International trade may even be entering a period of negative growth that will continue for a considerable period of time. Although China's foreign trade slowed down and experienced a temporary negative growth, it is still better than the performance of Global trade and major competitors, pushing China's position in the international trading system to go up and down.

It can be judged that the slowdown in foreign trade growth has become a major trend in the coming period.

The main reason is the overall slowdown of external market growth. It is estimated that the world economic growth rate in the second and even third ten years of this century will not reach the level of twenty years ago. Moreover, our share of world trade is much higher than before. Therefore, we can not expect that foreign trade can maintain the growth rate of two digit, or even twenty or thirty percent, in the first ten years.

When China's exports account for only 1% of the world's total, the rapid growth of exports can still be achieved when the global economic and trade is stagnant, because even if global trade is growing at zero and China's exports doubled, it will only increase from 1% to 2%.

But in China, many of the world's market share of export commodities has been very high. China's foreign trade can no longer be left alone when the global economy and trade are in decline.

At the same time, as the international division of labor is changing, the world trade has seen a significant deceleration or even a sharp decline in the global trade due to the cost changes and other reasons. The slowdown in China's foreign trade growth and the temporary negative growth are generally in sync with this trend, and the decline is less than the global level and the main competitors. Therefore, China's position in Global trade has not declined, but has continued to improve.

According to WTO data, in dollar terms, in 2014, Global trade in goods exports increased by 0.3%, China increased by 6.1%, the United States increased by 2.6%, the European Union grew by 3.7% (Germany's growth rate was 3.4%), Japan was shrinking by 3.5%, and was praised by many western public opinion as India's 2.5% growth in catching up with China's hope.

In 2015, exports of global goods trade shrank by 13.5%, China shrank by 2.9%, the United States shrank by 7.1%, the European Union shrinks 12.5% (of which Germany shrank 11%), Japan shrank by 9.5%, and India shrank by 17.2%.

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China's foreign trade development goal and kinetic energy promotion

In view of this, the share and position of China's foreign trade in the global trade system has not declined in the past two years, but has continued to rise.

Further, in the larger context, although China can not ignore the risk of being overtaken, China's new competitive advantages in the open economy, including long-term advantages and short-term advantages, are also increasingly shaping up.

The long-term advantages of our country stem from the advantages of China's human resources [-0.83%], industrial matching system, infrastructure, efficiency of public services, macroeconomic stability, and the extra brand image advantage brought by "comprehensive improvement of national strength" to "made in China"; the short-term advantage comes from the economic and social changes in the past few years.

On this basis, China's foreign trade and economic development goals and momentum are experiencing improvement.

First of all, China's early opening economic development goals are mostly primary: participation in the international division of labor system, in order to obtain a broader sales market; introduce competition mechanism; break through foreign exchange bottleneck constraints, so as to introduce advanced technology and equipment; create employment opportunities for hundreds of millions of surplus labor force in the traditional agricultural sector.

Scale and speed are of course our first goal.

To this end, our country pays at the expense of finance to acquire scarce foreign exchange, and at the expense of the micro market, to the benefit of the micro market to a certain extent.

Today, China is already the world's second largest economy and the first trading power, and has achieved relatively full employment in the past few years. The target of foreign trade development is becoming increasingly "big and high". It is not necessary to continue to sacrifice the micro market main benefit for the macro efficiency, and shift the international market target from "participation" to "lead", including the impact on the formulation of Global trade rules, the layout of the global value chain, the allocation and utilization of global resources, and the dividend of a higher level system.

Under such circumstances, the mode of low cost processing and large scale growth and development has been difficult to continue in the past. It is necessary to improve the quality and efficiency of supply through the supply side structural reform, from "big to big" to "superior and superior", from the scale speed leading to quality and benefit oriented, from serving GDP to serving GNP, and truly upgrading from a big trading country to a powerful trade country.

At the same time, the momentum of China's foreign trade and economic development is undergoing profound changes.

Construction machinery is one of the most prominent industries in China since the [2.34% fund research in the new century.

The annual export volume of a construction machinery enterprise in Hunan is 1 billion US dollars, and now the book export volume is only 3 or 400 million US dollars. But the volume and speed of the book export are temporarily downloaded in exchange for business efficiency and core competitiveness. The reason is that we have acquired the equivalent enterprises in Germany, Italy and Holland, and have acquired advanced technology, R & D team and marketing network, and also invested in factories such as India, Brazil and Turkey.

This kind of case is not uncommon. The so-called "no rainbow can be seen without wind and rain". Many foreign trade enterprises are trying to pform, focusing on high quality customers and quality markets, abandoning low price competition, developing services and quality competition.

From this point of view, in recent years, the world economic and trade situation is complex and changeable, which brings severe challenges to China's foreign trade, and also brings opportunities for pformation.

Moreover, relying on the new competitive advantage of open economy, in the new normal, in the process of linkage between industrial development, domestic market and international market, we have already stepped into the stage of fully implementing the strategy of relying on the domestic market to enhance the status of the international market.

Such a strategy will play an important role in enhancing the competitiveness of our industry and developing from a trading power to a trade power.

Open up new normal

Innovation leads the future.

On the basis of the above new advantages and new strategies of open economic competition, how can China develop the development potential under the new normal situation of foreign trade?

In 2015, the pilot project of China's foreign trade innovation was fully rolled out; in 2016, the government work report again put forward "promoting foreign trade innovation and development".

It is believed that this year will become the "fast forward", "breakthrough year" and "bumper harvest year" of innovation, pformation and Reform in the field of foreign trade.

The most important innovation is the innovation of management system. Its task is to decentralization and decentralization, constantly improve the efficiency of public services, and create a good environment for the development of our industry and foreign trade.

Although the volume of foreign trade has temporarily shrunk in 2015, the government has been speeding up its efforts to innovate the foreign-related management system and mechanism, create an internationalized rule of law business environment, and implement a major foreign strategy. From the introduction of post event supervision, the implementation of a single window of international trade, the promotion of bilateral free trade area construction to the full start of the "one belt and one way" construction and international capacity cooperation, the construction of the domestic free trade area is a courageous self revolution.

In the long run, when China's foreign investment surges, improving the efficiency of public services and improving the domestic business environment can also ensure that China will avoid being trapped in the domestic industry hollowing out as the big country of foreign investment.

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The second is foreign trade commodity innovation.

In the field of goods trade, this means that we should continuously push forward technological innovation and realize the continuous upgrading of the industrial and foreign trade commodity structure.

For this reason, we need constant innovation input.

In 2006, China's R & D investment ranked sixth in the world, second only to the United States, Japan, Germany, France and the United Kingdom.

In 2008, the total expenditure on research and development of the whole society (R&D) in China reached 457 billion yuan, which was 32 times that of 1991, with an average annual growth rate of 22.6%. The expenditure on per capita research and development expenditure based on the national population was 344 yuan, 28 times that of 1991. In 2008, the ratio of research and development funding to GDP was 1.52%, an increase of 0.87 percentage points over 1991.

In 2010, expenditure on research and development of the whole society reached 706 billion 260 million yuan, accounting for 1.76% of GDP.

In 2014, the expenditure for research and development of the whole society reached 1 trillion and 340 billion yuan, an increase of 155 billion 340 million yuan compared to 2013, accounting for 2.1% of GDP and 0.2 percentage points higher than that in 2013.

At the same time, enterprises have firmly established the status as the number one innovation entity, and R & D expenditure accounts for 76% of the total R & D expenditure in the world in 2014. The R & D staff accounts for 77% of the total R & D personnel in the country.

Today, China has made a series of important scientific and technological achievements, and some fundamental breakthroughs have huge potential for industrialization, such as the leading position in the field of quantum communication, which not only has irreplaceable strategic significance, but also can establish an unshakable dominant position for China's telecommunications equipment industry, which has already been among the first in the world, and open up a new world for industrial development.

The innovation of foreign trade goods that cannot be ignored is the integration of trade in goods and services.

The measurement of China's foreign trade depends on not only the "single champion" of trade in goods, but also the "second runner up" of service trade.

Compared with the developed countries such as the United States, the biggest difference is the service trade. In 2015, China's total trade in goods and services amounted to 4 trillion and 600 billion US dollars, and the United States was US $4 trillion and 990 billion. The difference between the two countries was about US $300 billion.

And the service link in the trade of goods is the way to win the enterprise.

According to the WTO report, the proportion of services in goods trade is nearly 50% based on added value.

As China has gradually become the main exporter of capital goods and large equipment, more and more domestic enterprises and individuals will go abroad to engage in diversified services such as R & D, design, consultation, management, maintenance, marketing and so on. The export of products and services will become the first choice of enterprises, and will also provide more opportunities for post-90s, 00 careers, employment and development.

Third, we must continue to push forward the pformation and upgrading of trade patterns.

On the one hand, it will continue to promote the pformation and upgrading of processing trade to general trade and the processing trade itself, and on the other hand, the upgrading of technological tools.

What many of our export-oriented enterprises need to do is not rush blindly to catch up with the emerging industries. Instead, we need to make more efforts to pform and upgrade the existing industries, especially the light industrial consumer goods export enterprises, with information technology and other new technologies.

If the information of two aspects of production and internal management is not far away from the importance of all industries, then, for the light industrial consumer goods industry, the importance of information in the sales link is particularly prominent.

Because in the capital intensive industries, the concentration ratio of the two party is relatively high, and even has reached the level of oligopoly competition. Even without the high level of modern information technology, buyers and sellers can relatively fast docking.

The light industry consumer goods industry is not the same, its buyers are often hundreds of millions of individual consumers, because the capital threshold of production is low, the producer's industrial concentration is relatively much lower.

When both producers and consumers are highly dispersed, the difficulty of docking between buyers and sellers is much higher than that of capital intensive oligopoly industries.

It is in this situation that through the information technology in the sales link, the buyer can break through the space restrictions and choose products in a larger range, and to some extent, get rid of some intermediate links, and strive for more desirable prices for himself. Producers can break through the space restriction to directly connect with consumers in a wider range and get rid of some intermediate links, and further analyze the data accumulated by the informatization, and plan the production and product delivery more accurately.

In China's industrial province, the industrial structure of Guangdong and Zhejiang is relatively "light". Correspondingly, for the high level industrialization of the Pearl River Delta and Zhejiang, the importance of information in the sales link is obviously higher than that in Liaoning, Inner Mongolia and Jiangsu.

In such a province like Zhejiang, the success of such a Alibaba as a successful enterprise started in circulation is not accidental. The success of informatization in the circulation and sales links represented by Alibaba has in turn promoted the sustainable development of Zhejiang's high level industrialization.

Such cases can give inspiration to other similar regions.

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The same cannot be ignored is the great economic and social significance of the integration of technological innovation and entrepreneurship.

In recent years, millions of small and micro enterprises and natural persons have made the first pot of business through the import and export trade of many small and micro businesses and natural persons on the platform of many foreign trade integrated services, cross-border electricity suppliers and international trade market procurement.

There are nearly 30 procurement and supply businesses in Yiwu, which provide about 2 million kinds of export commodities, while orders from Alibaba international station, Dunhuang network, jumei.com and other cross-border e-commerce platforms are as small as several US dollars to tens of thousands of dollars. The entry threshold of foreign trade has been significantly reduced, and the level of trade facilitation has significantly improved.

This combination of business model innovation and mass entrepreneurship has not only added vitality to China's foreign trade, but also has great social significance.

Through the business model innovation, we should reduce the threshold of entrepreneurship and develop foreign direct investment to create a pioneering and developing world for the aspiring emerging market economies.

In the long run, we need to work hard to consolidate the attractiveness of the real sector of the economy.

From the perspective of the whole society, the biggest and most profound challenge of China's manufacturing and foreign trade lies in the decline in the enthusiasm of the society for the manufacturing industry, and the decline of the real economic sectors in attracting talents.

In the 3 / 15 evening of 2014, Nikon camera quality problem has become one of the most striking problems that have been uncovered. This problem is the performance of Japan's manufacturing industry declining in the domestic and international economic system, and the quality of Japan's "new new human" is far lower than that of the old Japanese.

The lessons of Japan deserve our deep consideration.

Against the backdrop of slowing global economic growth, we can not expect foreign trade to maintain its growth rate of two digit or even twenty or thirty per cent in the first ten years. The expectation of absolute growth can be moderately relaxed. However, we can confidently continue to maintain relative growth rate above our main competitors, thus promoting China's continued position in the international economic and trade system as a whole.