China’s foreign trade beat expectations, up 15.5% year-on-year in March. What are the factors driving foreign trade up? Can this trend continue?(2023-04-20)
In the first quarter of this year, China’s import and export of goods reached RMB9.89 trillion, up 4.8% year-on-year. In March, trade in goods grew by 15.5% year-on-year. China’s foreign trade kicked off to a steady start. The reasons for such growth are manifold, including a low aggregate last year, robust orders driven by pent-up demand, smoother cross-border transportation, outcomes of sending Chinese trade delegations overseas, recovery of business expectations, among other factors. Three main driving forces are and will continue to be at play.
First, entity vitality has increased. Compared with the same period last year, 25,000 more Chinese foreign traders registered import and export, up by 5.9%. Import and export by private enterprises grew 14.4%, accounting for 52.4% of China’s total, an increase of 4.5 percentage points over the same period last year. Second, the product mix continues to improve. Exports of high value-added products such as automobiles have maintained a strong momentum. In the first quarter, auto exports soared by 96.6%. Electric vehicles, photovoltaic, and lithium batteries remain competitive, with combined exports up 66.9% in the first quarter, contributing 2 percentage points to overall export growth. Third, the market potential is gradually released. In March, China’s trade with emerging markets including ASEAN, Latin America, and Africa rose by 27.5%, 18.6% and 29.4% respectively, which partly offset the sluggish demand in the traditional markets.
Overall speaking, due to many constraints such as the global economic downturn, weak external demand, impact of unilateralism and protectionism and geopolitical risks, China’s foreign trade is still facing a severe and complex environment. MOFCOM will resolutely implement the plans made by the Party Central Committee and the State Council and work with all relevant departments to follow through the policies on stabilizing foreign trade, stepping up support for enterprises, and creating new drivers of foreign trade. We will go all out to stabilize foreign trade and upgrade trade structure so as to make a greater contribution to economic recovery and growth. Thank you.