China’s exports to show ‘remarkable’ rise despite coronavirus and US decoupling threat, customs chief says

14-Aug-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

China will eventually gain a bigger share of total global exports regardless of the impact of the coronavirus on foreign demand and threats of decoupling from the United States, according to the head of the country’s customs administration.

Having seen its global exports rise by 0.1 percentage points in the first four months of 2020, according to general Administration of Customs minister Ni Yuefeng, China’s share of global merchandise exports is expected to rise further even though global trade overall is shrinking.

“The ability to survive major shocks and the competitiveness of China’s foreign trade sector keeps rising… China’s market share could rise further as the resumption of [global] business continues. It’s remarkable,” Ni told the official Xinhua News Agency.

Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.

China was the world’s first major economy to see its production largely recover from the shock caused by the coronavirus, with a gross domestic product growth rate of 3.2 per cent in the second quarter following the historic 6.8 per cent contraction in the first three months of 2020.

Despite worries its export machine would contract sharply amid a slump in global demand caused by the coronavirus and the trade war with the US, China’s resilient exports recorded a surprise rise of 7.2 per cent in July compared to a year earlier.

This was the third increase in the last four months, helping to narrow the decline in the first seven months of the year to 4.1 per cent after its exports had slumped 17.2 per cent in combined data for January and February.

Liu Xuezhi, a senior researcher with the Bank of Communications, agreed the improvements could be attributed to China’s containment of the coronavirus and its ability to resume its production capabilities.

“[But] there is still uncertainty on whether the pandemic will break out again and how strong external demand will recover. Market expectations remain weak, since export orders grew slowly in the past several months,” said Liu.

This improvement is in sharp contrast to the rest world, with the World Trade Organisation predicting in June that the value of global trade would shrink by between 13 per cent and 32 per cent this year.

A research report from the Chinese Academy of Social Sciences also found that China’s share of total exports to its 13 largest trading partners rebounded to 18 per cent in April, an increase of 5 percentage points from a year earlier and the highest share since 2008.

China customs chief Ni attributed the better-than-expected trade performance to the nation’s effective control of the coronavirus and government’s swift actions to support the export manufacturing industry, including quickening export tax rebates and encouraging domestic sales of goods originally produced to be shipped overseas.

Ni also played down concerns that China’s new “dual circulation” strategy Beijing’s new plan to give priority to the development of the domestic market while maintaining the country’s trade strength saying that it will not have a “substantial impact” on exports.

Government data showed that goods with a value equivalent to only 12 per cent of the nation’s entire processing trade the assembly of imported components into finished products for export were sold in the domestic market in the first six months of the year, despite the easing of sales restrictions and the suspension tax levies.

Exporters often find it hard to switch their focus to the domestic market due to differing standards and the lack of sales channels, although there is significant space for growth within China’s large domestic market, added Ni.

There is still a significant amount of room to increase this given China’s large processing capacity and market size. It won’t significantly lower foreign trade

Ni Yuefeng

“There is still a significant amount of room to increase this given China’s large processing capacity and market size. It won’t significantly lower foreign trade,” Ni said.

Beijing has spent a great deal of effort to diversify its export market recently, with the 10 Southeast Asian countries that make up the Association of Southeast Asian Nations, now China’s top export destination after overtaking the US.

China is also trying to boost exports to countries under the Belt and Road Initiative, through which the government is trying to expand connectivity and economic ties with Western and Central Asia, the Middle East, Africa and Europe.

https://sg.news.yahoo.com/china-exports-show-remarkable-rise-085559733.html

 


Category: China

Print This Post