China's export diversification efforts pay off2019-05-09
China reported flat exports in the first four months of the year amid slowing growth in world trade and rising trade tensions, but exporters' diversification efforts also began to pay off, Chinese analysts said on Wednesday.
For the first four months, overall trade was down 1.1 percent to $1.4 trillion, but that was an improvement from the first quarter, when overall trade contracted 1.5 percent. Trade increased 16.5 percent year-on-year in the first four months in 2018.
In April, the nation's exports denominated in US dollar terms shifted into reverse from strong growth recorded in March. China's exports fell 2.7 percent year-on-year to $193.49 billion, much lower than expected, figures from the General Administration of Customs(GAC) showed on Wednesday.
In the first four months, exports was flat at 0.2 percent
The change signaled rising uncertainties in world trade amid an ongoing dispute between the US and China, experts said.
Niu Li, director of the State Information Center's Macroeconomic Research Office, told the Global Times on Wednesday that the weak performance during the first four months reflected a general cooling in the global economy coupled with the negative effects of the trade conflict with the US.
Rising trade tensions and increased economic uncertainty are exerting strong headwinds on world trade, and that process is set to continue in 2020 after trade grew more slowly than expected in 2018.
In a report in April, WTO economists forecast global merchandise trade volume growth to fall to 2.6 percent in 2019 from 3.0 percent in 2018.
"The flat growth in exports so far will make some analysts' projections of annual growth of 5 percent a challenging task to achieve" for China, Niu said.
Besides, trade between the US and China dropped significantly in the first four months as the Trump administration's reckless tariff war dragged on.
China-US trade now accounts for 11.5 percent of China's gross foreign trade, down from 20 percent in 2017, which was before the tit-for-tat trade tussle broke out last year.
If Trump makes good on his latest blatant threat that he is to raise tariffs on $200 billion of Chinese imports from 10 percent to 25 percent on Friday, bilateral trade is poised to tumble further, Chinese experts said, inflicting deeper wounds on the two economies and inflicting collateral damage on others.
However, experts said growing trade with the EU, members of the Association of Southeast Asian Nations (ASEAN), Japan and markets involved in theBelt and RoadInitiative (BRI) could offset the side effects of the trade conflict with the US.
China's broad effort to lower import duties on a wide range of goods will also unleash more buying power in the domestic market, they added.
China's trade with countries and regions along the BRI grew at two times the rate of overall trade during the January-April period.
Zhao Ping, director of the international trade department at the China Council for the Promotion of International Trade, said the US' importance as a trade partner has steadily declined since it began to wage a trade war against China in 2018.
"Chinese exporters have started to diversify their markets and that strategy has worked well with the impetus brought by the BRI," Zhao said, noting that the connectivity project aimed at facilitating trade among Asia, Europe, Africa and beyond has provided strong momentum to China's exports.
But external uncertainty is uncontrollable and China has used a package of policies to relieve the downward pressure, experts said.
In yuan terms, trade with the EU, China's largest trading partner, grew by 11.8 percent during the January-April period, while trade with members of the ASEAN bloc grew by 9 percent, GAC data showed.
Trade with BRI-related markets grew by 9.1 percent year-on-year, 4.8 percentage points higher than the overall trade growth in the period.
The internal trade value of the BRI markets has increased significantly, and surpassed the North American Free Trade Area to become the world's second-largest trading bloc after the EU as its trading momentum keeps rising, a report by four institutions including the China Center for International Economic Exchanges showed on Tuesday.
"The BRI market, with its vast number of emerging countries, is effectively rebalancing the landscape of global trade," Bai Ming, deputy director of theMinistry of Commerce's International Market Research Institute, told the Global Times on Wednesday.