From January to November 2014, China’s total import and export value of goods was US$3.90 trillion, an increase of 3.4% over the same period last year. The full year is expected to reach $4.27 trillion. It is expected that China’s foreign trade will still grow slowly in 2015 as a whole, but transformation and upgrading will continue to advance, and foreign trade will achieve more coordinated and sustainable growth.
Two major factors caused foreign trade growth in 2014 to be lower than expected
China’s overall foreign trade competitiveness has not declined
China’s import and export growth in 2014 was lower than expected. In addition to the slower recovery of the world economy than expected at the beginning of the year, it was largely dragged down by sluggish or even negative import growth. In the first 11 months of 2014, China’s exports increased by 5.7%, which was not much lower than expected, while imports only increased by 0.8%. In November, imports experienced a negative growth of 6.7%. The surplus in goods trade in the first 11 months reached US$332.48 billion.
Since 2014, the main reason for the weak growth in imports is the sharp decline in commodity prices in the international market. From January to November 2014, China’s bulk commodity imports mostly maintained steady growth. The import volume of integrated circuits, the commodity with the largest import value, increased by 5.6%. The other bulk commodities ranked first, in order of import value: crude oil, iron ore, primary shape plastics (Editor’s note: refers to plastic raw materials, etc.), soybeans . Except for primary-shaped plastics, the average import price of the above-mentioned commodities has fallen to a certain extent, which has lowered the growth of total import value.
The largest decline in import volume was coal, which fell by 9.4%. This is mainly due to the adjustment of domestic energy structure and the reduction of coal consumption. The decline in commodity prices has reduced the production and operation costs of enterprises, which is beneficial to recent export growth. However, continued deep decline may lead to turmoil in the international market and trigger economic and financial crises in some countries, which is very detrimental to the stable recovery of the world economy.
In addition to weak external demand, another reason why the import and export growth rate in 2014 was lower than expected was the underestimation of the impact of the large base caused by the inflated trade between the mainland and Hong Kong in 2013 and the inflow of speculative funds.
Excluding the impact of these factors, the actual growth rate of China’s foreign trade in 2014 should be above 5%, and the export growth rate should be higher. The world economy is still undergoing profound adjustments, market demand is recovering slowly, and the WTO predicts that global trade volume will only grow by 3.1%. The performance of China’s import and export proves that the overall competitiveness of foreign trade has not declined. Therefore, there is no need to worry too much about slower-than-expected growth.
The results of foreign trade transformation and upgrading in 2014 initially showed five major characteristics
Service trade has become a new growth point for foreign trade
The slow growth of the world economy and the weakening of domestic traditional competitive advantages have put increasing pressure on the domestic export industry. At the same time, this has also become a driving force for technological progress and industrial adjustment and transfer. In the first 11 months of 2014, the results of foreign trade transformation and upgrading continued to show.
First, exports of high value-added commodities increased. High-end products cannot be sold anymore, but products with new designs, full functions, and good performance-price ratio, brand products, and famous and high-quality products still maintain rapid growth. From January to November 2014, traditional labor-intensive export commodities such as textiles, clothing and shoes still achieved rapid growth of 5.3%, 6.0% and 12.6% respectively due to their upgrading. The export unit price of shoes increased by 6.2% compared with the previous year, and exports of motors and generators, automobiles and auto parts also grew rapidly.
Second, the growth rate of general trade is higher than that of processing trade. After processing trade became increasingly difficult to do, many original processing trade companies began to turn to general trade. From January to November 2014, general trade import and export increased by 5.6%, of which general trade export increased by 10.6%. The total value of general trade accounted for 53.9% of the total value of imports and exports, an increase of 1.1 percentage points from 2013. The import and export of processing trade increased by 3.3%, and the proportion of processing trade in total import and export value was basically the same as in 2013.
Third, the proportion of import and export of private enterprises has increased. From January to November 2014, in contrast to the 2% increase in import and export of foreign-invested enterprises and the 0.9% decrease of state-owned enterprises, the import and export of private enterprises increased by 6.2%, a growth rate higher than that of other types of enterprises. The total import and export value of private enterprises accounted for 34.5% of China’s total foreign trade value, an increase of 1.2 percentage points from 2013.
Fourth, import and export growth in the central and western regions is faster than that in the eastern region. Data for the first three quarters of 2014 show that the import and export of the central and western regions grew by 17.3%, much higher than the national growth rate. The contribution rate to the national foreign trade growth reached 68.4%, accounting for 14.7% of the total import and export value, an increase from the previous year. 1.8 percentage points. The foreign trade in the eastern region is in the throes of structural transformation, and the growth rate of imports and exports is generally not high.
Fifth, imports and exports to several major markets have grown steadily. From January to November 2014, China’s trade with Europe and the United States stabilized. The total value of China-EU bilateral trade was US$557.46 billion, an increase of 10.1%. The total value of bilateral trade between China and the United States was US$502.0 billion, an increase of 6.4%. The total bilateral trade value between China and ASEAN was US$432.72 billion, an increase of 8.4%. The total value of bilateral trade between China and Japan was US$285.0 billion, an increase of 0.4%. The total bilateral trade value between the Mainland and Hong Kong was US$333.25 billion, a decrease of 7.7%.
Although 2014 was the third consecutive year that the growth rate of China’s trade in goods has hovered at single digits, trade in services still maintained double-digit growth. In the first three quarters of 2014, China’s total service import and export value was US$430.5 billion, an increase of 10.2% over the same period last year.Among them, service exports were US$157.2 billion, a year-on-year increase of 6.8%; service imports were US$273.3 billion, a year-on-year increase of 12.2%. Service trade has become a new growth point for foreign trade. The deficit in services trade was relatively large, reaching US$116.1 billion in the first three quarters.
Looking forward to steady growth in foreign trade in 2015
Be wary that trade frictions against products made in China will continue unabated
Looking forward to 2015, the world economy will maintain a slow recovery and adjustment trend. The U.S. economy continues to recover. Stimulated by falling oil prices, the American people’s willingness to consume has increased, the real estate market has picked up, and the unemployment rate has dropped to 5.8%. Inflation will remain moderate.
The economic performance of the Eurozone was worse than expected in 2014, and the shadow of the debt crisis has not completely dissipated. Economic growth will still be relatively sluggish in 2015, and it is estimated that a trillion euros of investment projects will be launched in early 2015 to stimulate the economy.
Japan’s economy is still showing signs of improvement after two quarters of contraction. On October 31, 2014, Japan decided to further expand the scale of its ultra-loose monetary policy. On December 15, 2014, the Liberal Democratic Party won the parliamentary election again, and Shinzo Abe continued to be in power. It remains to be seen whether Japan’s economy will improve.
The economies of developing countries and regions will maintain growth, but performance will be uneven. The Ebola epidemic in West Africa has been brought under control. However, uncertainties such as the return of the US dollar and tensions in the Middle East and Ukraine may still have a negative impact on the continued recovery of the world economy.
Our country is in the throes of structural adjustment and institutional reform. It is expected that the national economy will continue to grow in general in 2015, but downward pressure will be greater, enterprises will face increasing difficulties in production and operation, and there will be certain economic and financial risks. The recently held 2014 Central Economic Work Conference has set the tone. In 2015, we will continue to implement proactive fiscal policies and prudent monetary policies to promote the “troika” (Editor’s note: consumption, investment, and net exports) in a more balanced manner. Economic Growth. The country will promote the simultaneous development of new industrialization, informatization, urbanization and agricultural modernization, gradually enhance the supporting role of strategic emerging industries and service industries, and strive to promote traditional industries to move towards mid-to-high-end industries. Institutional reform and structural adjustment will gradually release new vitality for economic growth.
The traditional low-cost advantage of China’s foreign trade exports is gradually lost, and the adjustment and transfer of low-end industries is an arduous task. New advantages centered on technology, brand, quality and service are still in the process of growth. Competition in the international market has become more intense, and trade frictions against products made in China will continue unabated.
Looking back at the changes in recent years, it can be said that the 30 consecutive years of high growth in imports and exports have been replaced by medium- to low-speed growth. The “Twelfth Five-Year Plan” period, which is expected to end in 2015, will be the first five-year period in which the average annual growth rate of foreign trade falls below double digits since the reform and opening up. The past approach of relying on government support and policies to promote foreign trade development is gradually diminishing.
Faced with such a situation, only by persevering in adjusting the structure, changing the mode and promoting balance can we ensure the stable growth of foreign trade. Through comprehensive opening up, industrial innovation and structural adjustment, promoting greater coordination of domestic and foreign economies, and further improving the level of participation in the international division of labor and competition, foreign trade can gain broader space for development and achieve sustainable and stable growth.
Recently, on the basis of achieving certain results after more than a year of operation, the state encourages the Shanghai Free Trade Zone to share its experience and measures in opening up, including negative list management, opening up of investment, trade, finance, and service industries, as well as interim and ex-post supervision, to the whole country. promotion. Three more free trade zones will be established in Guangdong, Tianjin and Fujian. All these will push the foreign trade structure adjustment, mode transformation and balance promotion in 2015 to a new level. As long as there are no major abnormalities in the external environment, China’s import and export of goods will maintain a steady and upward trend in 2015.
