Counter to the view that China is losing its place as the world’s largest trading country for goods and that its slowing export growth foretells economic collapse, the slowdown is actually a prelude to the economy's transformation and upgrading, contended a commentator.
China’s foreign trade got off to a good start in the first quarter, wrote Hui Ya, a commentator and macroeconomics researcher, at news site yicai.com. According to data from the General Administration of Customs (GAA), the combined value of imports and exports (in dollar terms) increased by 15 percent year on year.
However, compared with the sharp 24 percent increase in the value of imports, the value of exports grew rather slowly at 8.4 percent. This development results largely from the sluggish growth in exports of traditional labor-intensive products, such as textiles and garments, shoes and furniture.
Equally notable is that the latest data from the WTO show that after China had been the world’s largest trading country for three consecutive years, the US regained that place in 2016 by a small margin of US$20 billion. This change has two contributing factors.
For one thing, the margin of difference has been narrowing in recent years. Although China’s lead on America has expanded from US$70.4 billion in 2007 to US$770.9 billion in 2015, the gap then began to narrow, down to US$643.6 billion in 2016.
Another factor is that, given the fact bulk commodities make up a large share of China’s imports and global prices for bulk commodities stayed relatively low throughout 2016, the value of imports in 2016 reduced sharply.
Hui argued that the change in place is perfectly normal, as the temporary slowdown in exports growth is just a step in the country’s long-term foreign trade development.
The current rising anti-globalization trend and trade protectionism are posing serious challenge to the process of the international effort to reinvigorate trade over the last decade. China, by contrast, has always been a staunch force advocating globalization and trade facilitation, according to Hui.
Meanwhile, the country is paying attention to transforming and upgrading its foreign trade structure. In terms of exports, it is encouraging enterprises to improve the added value of exports by strengthening innovations and moving up the value chain. Therefore, the temporary slowdown in China’s exporting is a prelude to a restructuring of the country's foreign trade, Hui concluded.