The Development Situation of China’s Foreign Trade in 2022

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President Xi Jinping pointed out that “China will tap the growth potential of foreign trade and make positive contributions to promoting the growth of international trade and the development of the world economy. China will promote the accelerated development of new business models and modes such as cross-border e-commerce and cultivate new dynamics in foreign trade.”

In the face of a century of changes and the century’s epidemic, China has promoted deep reforms with a high level of openness and pushed foreign trade to achieve faster growth. Data released by the General Administration of Customs show that China’s total import and export value was 6.2 trillion yuan, up 13.3% year-on-year, and foreign trade achieved a steady start in the first two months of this year.

This year’s “Government Work Report” will “maintain stability and improve quality” as the expected goal of import and export development, clearly put forward “to expand a high level of openness to the outside world, and promote the stable development of foreign trade and foreign investment”. In accordance with the decision and deployment of the Party Central Committee and the State Council, various departments around the country focus on stabilizing the scale, improving quality and promoting innovation, continuously releasing policy dividends, and constantly expanding the space for foreign trade and economic cooperation, and promoting foreign trade to maintain stability and improve quality with confidence.

Stable Start, the Report Card is Very Bright

“The first year to reduce 0.7 percentage points, the final can enjoy 10% import tariff reduction, RCEP came into effect, our export orders to the Japanese market growth of 10%.” Recently, Huang Jianfang, customs supervisor of Jiangsu Suzhou Jinhu Knitted Garment Co., Ltd, said that in the first two months of this year, the company applied for 51 RCEP certificates of origin signed to Japan, and the staff of the company were more energetic.

On January 1, the Regional Comprehensive Economic Partnership Agreement (RCEP), the world’s largest free trade agreement, officially entered into force. Thanks to the policy dividend brought by the implementation of RCEP, the export competitiveness of Suzhou Jinhu Knitwear Co.

China’s foreign trade ushered in the “open door”, from the import and export data in the first two months, the main features are as follows –

The scale is stable. Exports were 3.47 trillion yuan, an increase of 13.6%; imports were 2.73 trillion yuan, an increase of 12.9% …… before February, the global new crown pneumonia epidemic is still spreading, raw material prices hovering high, and the supply chain suffered a shock in the background, China’s foreign trade achievements can be remarkable. “This year’s foreign trade achieved a smooth start, which was achieved on the basis of a high base in 2021, is particularly valuable.” Gu Xueming, director of the Ministry of Commerce’s Institute of International Trade and Economic Cooperation, said that in 2021, the total value of China’s imports and exports crossed the two major steps of 5 trillion and 6 trillion U.S. dollars during the year, a new record high. In the first two months of this year, the total value of foreign trade imports and exports once again achieved double-digit growth, fully demonstrating the strong resilience and comprehensive competitiveness of China’s foreign trade, and laying a solid foundation to promote the stability and quality of foreign trade throughout the year.

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Excellent structure. Exports of electrical and mechanical products were 2.02 trillion yuan, an increase of 9.9%, of which 250.76 billion yuan of exports of automatic data processing equipment and parts thereof, an increase of 7.2% …… before February, China’s exports of mechanical and electrical products to maintain good growth, commodity structure more reasonable, more balanced imports and exports, foreign trade quality to further improve. In addition, the main body of foreign trade vitality effectively stimulated, in the first two months, private enterprises import and exported 2.99 trillion yuan, an increase of 16.1%, the proportion of the total value of foreign trade than the same period last year to raise 1.1 percentage points to 48.2%, becoming an important force in the growth of China’s foreign trade.

Policy accuracy. Since last year, China has precisely introduced a series of policies and measures to stabilize the main body, stabilize the market and ensure the stability and smooth flow of the supply chain of the foreign trade industry. For example, the continuation and improvement of some of the tax reduction policies, the implementation of new structural tax cuts, increased support for small and medium-sized micro-enterprises financing, accelerate the development of new modes of foreign trade, and further deepen the reform of cross-border trade facilitation. This series of policies have been implemented in detail and their effects have been continuously released, greatly stimulating the vitality of market players and becoming an important support for stable growth of foreign trade.

Innovative Development, New Dynamic Energy Continues to Gather

In the multi-modal supervision center of Weihai Customs in Shandong Province, a batch of cross-border e-commerce retail import goods from South Korea was waiting for inspection and release on the assembly line. “This batch of goods totals 2,909 pieces with a value of 130,000 yuan, mainly including cosmetics and other daily necessities.” Shao Pengfei, head of e-commerce shipping at Shandong Pan-China Logistics Co., Ltd, said that unlike usual, this batch of goods also included photo supplies such as tripods, which had just made the “white list” of imported goods.

By “white list”, Shao Pengfei means the list of cross-border e-commerce retail import goods. Earlier this year, the Ministry of Finance, the Ministry of Commerce, and other eight departments issued the “Announcement on Adjusting the List of Goods for Cross-border E-commerce Retail Imports”, optimizing and adjusting the list of goods for cross-border e-commerce retail imports since March 1, adding 29 items such as skiing equipment, household dishwashers, and photography tripods, bringing the number of goods on the adjusted list to 1,476.

“The increasing number of commodity tariff items and richer categories are conducive to promoting the development of new cross-border e-commerce business and promoting the high-quality development of foreign trade.” Tian Guofeng, executive deputy secretary-general of the China Association of Trade in Services, said.

The main comrade in charge of the Ministry of Commerce said, to promote the stable development of foreign trade, enhance the comprehensive competitiveness of foreign trade, and promote the high-quality development of foreign trade, all need to put innovation and development in a more prominent position. All local departments and foreign trade enterprises are closely around the construction of a new development pattern, and innovative development model, optimizing the layout of the international market, and actively cultivating new dynamics of foreign trade. A series of innovative initiatives not only help to stabilize the fundamentals of foreign trade but also help to further enhance the new advantages of enterprises in participating in international cooperation and competition.

The New Business Model is Changing Day by Day

The number of customers exceeds 4,000, the average daily processing volume is about 400,000 orders, and the total area of overseas warehouses reaches 1.2 million square meters. Today, the cross-border e-commerce infrastructure service provider, Fujian Zongteng Network Co., Ltd. has built a cross-border logistics network covering many countries and six continents around the world.

“The overseas warehouse has played an important supporting role in helping the global foreign trade industry chain and supply chain run smoothly, becoming an important part of stable foreign trade.” Wang Diamond, president of Zongteng Group, said. According to the introduction, at present, the number of overseas warehouses invested and built by Chinese enterprises has exceeded 2,000, with a total area of over 16 million square meters.

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The New Platform is Bursting with Vitality

“With the east wind of the expansion of the cross-border e-commerce comprehensive pilot zone, we are proceeding to expand our business to more regions.” The head of an enterprise engaged in international logistics business said that the cross-border e-commerce comprehensive pilot zone has laid the foundation for the leapfrog development of logistics enterprises by giving policy inclination in terms of capital, credit, export credit insurance, and public service platform construction.

Comprehensive Free Trade Zones and Comprehensive Pilot Zones for Cross-border E-Commerce are important platforms for opening up to the outside world. 2021, the import and export volume of China’s comprehensive free trade zones, free trade pilot zones, and Hainan Free Trade Port will increase by 24.3%, 26.4%, and 57.7% respectively compared to 2020. The State Council recently issued the “Approval on the Establishment of Comprehensive Pilot Zones for Cross-border E-Commerce in 27 Cities and Regions, including Erdos”, so far, China has set up comprehensive pilot zones for cross-border e-commerce in 132 cities and regions. Experts said that the establishment of a number of new comprehensive pilot zones is conducive to stimulating the vitality of foreign trade entities, improving the efficiency of foreign trade operations, stabilizing the supply chain of the foreign trade industry chain, and realizing the integration of industry digitization and trade digitization.

New Markets Accelerated Development

On March 14, 126 special containers declared for export by Dalian Sinotruck Container Co., Ltd. were quickly cleared through customs and exported to Kenya. “With the booming development of the ‘Belt and Road’ market, the demand for special containers is getting bigger and bigger, and the sales road has opened up, further boosting our confidence in upgrading our products,” said Xu Randi, manager of the marketing department of Dalian China Railway Group Co.

Foreign trade enterprises in Europe and the United States and other traditional markets, while accelerating the development of “one belt and one road” along with the emerging markets such as countries, and constantly improve the ability to resist market risks. In the first two months, China’s total import and export to countries along the “Belt and Road” was 1.92 trillion yuan, an increase of 18.3%; the total import and export with RCEP trading partners were 1.85 trillion yuan, an increase of 9.5%.

Improving Quality and Efficiency, Multiple Initiatives Continue to Make Efforts

This year, China’s foreign trade achieved a stable start, but still faces many difficulties and pressures. From the demand side, the global new pneumonia epidemic has been repeatedly fluctuating, the world economy does not have enough momentum to recover, and there is great uncertainty in the external demand market. From the supply side, supply chain bottlenecks are difficult to ease in the short term, and the supply of energy and raw materials is still tight. Anchored on the goal of maintaining stability and improving quality, to further promote the quality and efficiency of foreign trade, all parties need to work closely together and take multiple measures to sustain efforts.

The General Office of the State Council recently issued “on the cross-cycle adjustment to further stabilize foreign trade,” the forward-looking does a good job of cross-cycle adjustment, helping enterprises to alleviate difficulties, especially to support small and medium-sized foreign trade enterprises to ensure orders, stable expectations. The Ministry of Commerce has implemented four special actions, including cross-cycle adjustment to stabilize foreign trade, market diversification, smooth foreign trade supply chain, and foreign trade innovation and quality improvement, focusing on improving the comprehensive competitiveness of China’s foreign trade; the General Administration of Customs has focused on optimizing the business environment at ports and strongly supported the construction of an open platform for foreign trade.

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Financial Escort to Stabilize the Industrial Chain

“We are in the middle of the industrial chain, we have to consider both procurement costs and market demand and transportation costs, and no link upstream or downstream can be ignored.” The person in charge of Midea Group said that today, China Export and Credit Insurance Corporation’s support for Midea Group has extended from safeguarding its own receivables collection risk to supporting Midea Group’s upstream and downstream industrial chains. In 2021, China Credit Insurance Corporation supported its upstream and downstream industrial chain business by over RMB 2.2 billion, an increase of over 120%; and supported Midea Group’s exports by over USD 11.3 billion.

In order to further play the role of export credit insurance, in February this year, the Ministry of Commerce and China Credit Insurance jointly issued the “Notice of Work on Increasing Export Credit Insurance Support and Making Good Cross-Cycle Adjustment to Further Stabilize Foreign Trade”, giving full play to the cross-cycle counter-cyclical adjustment role of short-term insurance, effectively strengthening the support and protection for small and medium-sized foreign trade enterprises, innovating policy financing products, and improving service capacity and level.

Reducing Taxes and Fees to Lower the Burden of Enterprises

On March 14, Yajie (Suzhou) Technology Co., Ltd. declared a batch of bonded goods worth RMB 2.46 million to Suzhou Industrial Park Customs for domestic sales. According to the relevant regulations, the interest of RMB 823 generated from the domestic sales business was reduced and exempted.

On March 14, Yajie (Suzhou) Technology Co., Ltd. declared a batch of bonded goods worth RMB 2.46 million to Suzhou Industrial Park Customs for domestic sales. According to the relevant regulations, the interest of RMB 823 generated from the domestic sales business was reduced and exempted.

Facilitating Customs Clearance and Enhancing Service Efficiency

China continues to optimize the business environment at ports. At present, except for special circumstances, all 38 types of regulatory documents involved in the import and export process can be accepted through the “single window” for international trade. In December 2021, the overall customs clearance time for imports and exports nationwide was 32.97 hours and 1.23 hours respectively, a reduction of 66.14% and 89.98% compared to 2017.

At present, the external environment facing the development of foreign trade is more complex and uncertain, but the fundamentals of China’s resilient and long-term positive economy remain unchanged, and the development trend of foreign trade stability and quality remains unchanged. Experts said that we should make full use of the two markets and two resources, constantly expand foreign trade and economic cooperation, promote deep reform with a high level of openness, promote the development of high-quality foreign trade, and make greater contributions to the construction of a new development pattern with a large domestic cycle as the main body and a dual domestic and international cycle to promote each other.

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