BEIJING: China’s foreign trade will continue its upward trend this year, though it is vital for the government and exporters to curb the pressure brought by high commodity prices and shipping container costs, according to experts and business leaders.
They commented after the general administration of customs announced that China’s foreign trade soared 28.2% year-on-year (y-o-y) to 14.76 trillion yuan (RM9.7 trillion) in the first five months of this year, reflecting that China’s exports and imports are picking up growth momentum that is increasingly driven by domestic demand as well as booming overseas orders.
Chen Bin, executive vice-president of the Beijing-based China Machinery Industry Federation, predicted that second-quarter results will show that China’s export growth remained strong in that period, as the Covid-19 pandemic saw a resurgence in export-oriented countries such as India and Vietnam.
Ding Yifan, a senior research fellow at the Institute of World Development at the Development Research Centre of the State Council, said: “If both foreign and domestic manufacturers in these countries are severely disrupted by the pandemic and stop working, it will generate an impact on the global supply chain, and many orders may continue to return to China.”
Stimulus measures in developed economies also brought sustained demand for products manufactured in China, said Lu Ting, chief China economist at Japanese bank Nomura.
From January to May, China’s exports soared 30.1% y-o-y to 8.04 trillion yuan (RM5.2 trillion), while its imports jumped 25.9% to 6.72 trillion yuan (RM4 trillion). Its trade surplus surged 56.2% y-o-y to 1.32 trillion yuan (RM774bil), according to customs data.
The country’s total foreign trade expanded 26.9% y-o-y to 3.14 trillion yuan (RM2 trillion) n May, while it imported 1.42 trillion yuan (RM774bil) of goods from global markets, up 39.5%.
The monthly import growth in May underscores that domestic demand has increased amid the construction and investment revival, even though the surging price of raw materials and a low base effect also count, said Mei Xinyu, a researcher at the Beijing-based Chinese Academy of International Trade and Economic Cooperation.
Despite growing trade volumes, Chinese companies face challenges in the foreign trade sector, including rising prices for materials, exchange rate fluctuations and difficult marine logistics, said Chen Zhongda, deputy head of Yinzhou Customs, a branch of Ningbo Customs in East China’s Zhejiang province.
To ensure production, Chinese manufacturers have started to build their stocks, driving the rapid growth of imports of products including energy resources, said Gao Ruidong, chief macroeconomist at Everbright Securities.
China’s trade with the Association of Southeast Asian Nations reached 2.19 trillion yuan (RM1.4 trillion) in the first five months of the year, an increase of 29.2% y-o-y, while trade with the European Union rose 28.7% to 2.06 trillion yuan (RM1.3 trillion).
The value of goods trade between China and the United States grew 41.3% y-o-y to 1.82 trillion yuan (RM1 trillion). – China Daily/ANN