The Paper.cn:

With the normalization epidemic prevention and control worldwide, there is a decline in demand for trades in products regarding COVID-19 epidemic prevention and control. Many manufacturing countries have resumed their production. Will China face an increasing pressure on adjusting its export structure? What's your take on the future of China's foreign trade? Thanks. 

Li Xingqian:

Thanks for your questions. In the first half of this year, China's total imports and exports expanded 27.1% year-on-year in terms of the yuan, hitting a historical record high. This is a result of multiple factors, such as international supply and demand. What matters most is the fact that supply creates demand. Since the outbreak, China has taken creative approaches to offering services and guaranteeing the production and people's livelihoods worldwide through international trade, and the country has strengthened its capacity to compete in a comprehensive manner. There was a huge gap between supply and demand in the COVID-induced international market. China's supply chain in international trade has quickly adapted to the changing demand of international markets, and supplied marketable products in a timely manner, which met the needs for epidemic prevention, and production and life across the world. As a responsible major country, China has provided over 300 billion masks, 3.7 billion protective suits and 4.8 billion testing kits to more than 200 countries and regions. More than 600 million doses of COVID-19 vaccine have been offered to the rest of the world. All these made great contributions to the global battle against COVID-19. In addition, in the purpose of offering services to meet the needs of people working from home during lockdowns worldwide, foreign trade companies in China have mobilized available resources in manufacturing, improved R&D and design capabilities, and strengthened quality control. A great amount of high-quality consumer goods have been exported to the rest of the world.  

Beginning this year, with a more rapid speed of vaccine rollout, some countries have seen an economic rebound and gradually resumed their production, posing both challenges and opportunities for China's foreign trade. On the one hand, China's exports will face stiffer competition in international markets. On the other hand, there is a huge demand for raw materials and equipment for production across the world, which creates an increasing demand for importing capital goods and intermediate goods from China. The proportion of consumer goods in exports dropped in the first six months of this year, while capital goods and intermediate goods in exports accounted for 76.7% of the total, 2.5 percentage points higher than the previous year. The changes you mentioned are exactly the chance and the driving force for China's industrial chain and supply chain in international trade to better adapt to international markets and boost its capacity to compete. We hope countries around the world reopen economy as soon as possible, restore close trade cooperation, and work together to inject vitality into the global economy.

According to our recent survey, around 40% of the foreign trade companies saw growing export orders that were newly placed compared to the previous year. It is expected that the recovery of external demand and the steady economic growth will continue to underpin the development of China's foreign trade. However, in light of the growing base last year, there will be a decline in the growth of foreign trade in the second half of this year. The development of foreign trade still faces uncertainties and instabilities. The risk of COVID-19 resurgence remains and the current global economic recovery is weak. The rising cost of raw materials, the disruption of maritime transportation for logistic services as well as other problems have further squeezed profit margins of foreign trade companies and affect their willingness to receive orders. 

Currently, we are keep a close eye on the changes in international trade. In the second half of this year, we will focus on resolving pronounced problems encountered by companies, and work with related departments and the local governments to introduce new policies and measures that are more targeted, to fully reduce the overall cost of foreign trade companies. By pursuing an innovation-driven growth, we will firmly promote high-quality development of trade and boost the capacity to compete in international trade, in a bid to consolidate the foundation for developing foreign trade industries, sustain a stronger momentum of development and ensure unimpeded circulation channels, and move faster toward establishing a new development paradigm. Thanks.