Shou Xiaoli:

Thank you, Mr. Li. Now the floor is open to questions. Please identify your news outlet before raising questions.

CCTV:

You just introduced that China's foreign trade achieved double-digit year-on-year growth in the first half of this year, demonstrating positive growth for 13 consecutive months. In your opinion, what are the main drivers of China's continuous growth in foreign trade? Is China able to maintain such steady and positive trend in foreign trade in the second half of the year? And what's your forecast for China's foreign trade in the second half of the year? Thank you.

Li Kuiwen:

Thank you for your questions. In the first half of this year, China's domestic economy has been stable, strong, and improved steadily, and foreign trade increased rapidly. In the first half of this year, China's total imports and exports hit record high of 18.07 trillion yuan. The nation's total foreign trade expanded by 22.8% compared with the same period of 2019, posing positive growth for 13 consecutive months. The momentum of steady growth in foreign trade was further consolidated. Specifically, the main reasons driving the continuous growth include:

First, thanks to the stable and growing domestic economy, the vitality of market entities has been stimulated, which provided strong support for the steady growth of foreign trade. In the first half of the year, the Chinese economy steadily recovered; major economic indicators, including industrial added value, fixed asset investment, and total retail sales of consumer goods improved continuously; and production and demand continued to rebound. This has laid a solid foundation for the steady growth of foreign trade. In particular, relying on China's policies to ensure steady growth in foreign trade, the number of platforms of high-level opening up increased rapidly, and the advantages of new trade forms and models became more prominent. The data shows that in the first half of the year, imports and exports from comprehensive bonded zones increased by 29.1%, imports and exports from pilot free trade zones increased by 32.1%, and imports and exports of the Hainan Free Trade Port increased by 46.1%, all significantly higher than the country's overall growth rate. In the same period, imports and exports of cross-border e-commerce grew 28.6%, and exports of market purchases increased by 49.1%. In the first half of the year, the number of Chinese enterprises with actual import and export performance increased from 36,000 to 479,000. Meanwhile, Chinese foreign trade enterprises spared no efforts to maintain stability in production and foreign trade, and the amount of imported and exported goods increased by 16% and 29%, respectively. This bolstered the security and stability of international industrial chain and supply chain and further consolidated the sound momentum of China's foreign trade development.

Second, the sustained recovery of the global economy has boosted external demand. In the first half of the year, several international organizations upgraded their forecasts for this year's global economic growth. For example, in April, the International Monetary Fund (IMF) raised its global growth forecast for 2021 to 6%. In June, the World Bank raised its estimate to 5.6%. The global economic recovery has boosted international trade and China's exports. In the first half of the year, China's exports to the U.S., the EU, and ASEAN countries increased by 31.7%, 25.5%, and 27.8%, respectively, while China's exports to Latin America and Africa grew by 47% and 27.7%, respectively.

In addition, last year's lower base and price factors also, to some extent, helped drive the growth of foreign trade. In the first half of last year, China's import and export volume fell by 3.3% year-on-year, only equivalent to the same period in 2018. This year, the overall price of global commodity markets has shown an upward trend. At the end of June, the CRB index, a representative indicator of global commodity markets, increased by over 25% since the beginning of 2021 and more than doubled compared with the lowest point in the first half of last year. Influenced by the rising prices of global major commodities, China's import price index is estimated to be 108.5 for the first half of this year, while the contribution rate of price to import growth is estimated to be 35.4%.

As for China's foreign trade outlook in the second half of the year, in general, as COVID-19 keeps wreaking havoc in many parts of the world, China's foreign trade still faces uncertainties in a complex global epidemic environment. In the second half of last year, China's total imports and exports grew 27% compared with the first half of last year. With a higher base, the growth rate of China's foreign trade may slow down in the second half of this year. However, imports and exports are still expected to maintain relatively rapid growth throughout the year. Thank you.