The Poster News APP:

With its foreign trade reaching another record high in 2022, China remains the world's largest goods trader. At present, with rising risks, such as the global economic recession and a slowdown in the growth of external demand, China's foreign trade faces a challenging environment for development. How does the Ministry of Commerce view foreign trade in 2023? What upcoming measures will be adopted to stabilize foreign trade? Thank you.

Wang Wentao:

As you mentioned, China's foreign trade set a record high in 2022. The volume of trade in goods surpassed 40 trillion yuan for the first time, standing at 42.1 trillion yuan, with a year-on-year increase of 7.7%, leading the world for six consecutive years and making a great contribution to the stable performance of the macroeconomy. The contribution of net trade exports in goods and services was responsible for 17.1% of GDP growth, driving GDP growth by half a percentage point. At the beginning, I mentioned this was a highlight of last year's economic work.

With the rising risks of global economic recession and the probability of stagflation, the external environment poses severe challenges to us. According to the WTO's prediction, global trade in goods this year will only increase by 1%, down 2.5 percentage points from 2022. In other words, the possibility of expanding the global foreign trade pie this year is relatively small. We must think about continuing to harness our strengths under such circumstances. The problem now is, as you mentioned, how we should view foreign trade in 2023 and what we intend to do under such circumstances.

How should we view foreign trade in 2023? This year's mounting pressure on foreign trade is due to weakening external demand. Under such circumstances, many enterprises have reported decreased orders and delays in placing orders. Moreover, bulk orders become small orders, and standing orders become short-term orders. Some media, especially economic media, have also provided an analysis. These are all current situations. Apart from weakening external demand and rising risks such as a global economic recession, protectionism and geopolitics have also led to challenges for Chinese enterprises.

What do we intend to do? According to the report to the 20th CPC National Congress, we will build China into a trader of quality, which requires us to stabilize the volume of foreign trade. Building a trader of quality consists of three pillars: upgrading trade in goods, developing new mechanisms for trade in services, and promoting digital trade. We will work on the above three aspects. Generally speaking, we will stabilize trade volume and improve trade structure this year. We will stabilize trade volume first. Meanwhile, with the upgrade in industries, economic development, and enhanced comprehensive strengths, we need to improve the foreign trade structure to strengthen its comprehensive competitiveness.

We will prioritize the following three aspects regarding stabilizing trade volume. First, we will maintain the continuity of policies. By doing so, we intend to anchor market expectations. Last year, foreign trade was confronted with severe challenges. In response to the impact of COVID-19 and uncertainties in external demand, we consecutively issued two policies to stabilize foreign trade, which created 42.1 trillion yuan of foreign trade volume last year. We are researching some policies mainly based on business entities' needs. We are listening to the opinions of relevant provinces and enterprises and get to know their difficulties. Considering all these difficulties, we will introduce policies in line with international rules to promote the development of foreign trade. Second, we will stabilize the market. We will stabilize traditional markets such as the U.S., Europe, Japan, and South Korea and expand emerging markets. Latin American countries and the Belt and Road partner countries have enormous market potential. Last year, trade growth between China and ASEAN surpassed traditional markets. ASEAN has become China's largest trading partner. Third, we will stabilize the trade channels. We will use traditional channels such as the China Import and Export Fair (Canton Fair) to launch trade promotion activities. At the same time, we will also encourage enterprises to participate in overseas expos, and encourage local governments, trade promotion institutions, and business associations to carry out a diverse range of trade promotion activities. According to media reports, since China downgraded its response measures against COVID-19, some enterprises have organized teams to travel overseas to obtain orders. These are proactive actions taken by enterprises.

We will adopt three major measures concerning optimizing the foreign trade structure. First, we will improve the modes of trade. While developing general trade, we will support the transformation and upgrading of processing trade and its shift (to the central and western regions). We will take coordinated steps to promote the rapid and healthy development of new forms and models, which are now growing rapidly, including cross-border e-commerce, overseas warehouses, and the maintenance of bonded goods. Concerning trade in services, based on the pilot program launched earlier, we will advance the building of national demonstration zones for the innovative development of trade in services. Second, we will optimize the layout of foreign trade supply chains. We will implement the coordinated regional development strategy, improving trade quality in the eastern regions and raising the trade proportion of the central, western and northeastern regions. At present, there is an increasingly strong tendency for the shift of industries to the central, western, and northeastern regions. The advantages in locations, resources, and costs of production factors of these regions are gradually emerging, including labor and land resources. In terms of transport, as the China-Europe Railway Express and new land-sea transit routes have been further developed, transport is improving, providing a stronger driving force for industrial relocation. Concerning the layout of supply chains, the costs of production factors in coastal areas continue to increase, but the central, western, and northeastern regions still have huge potential. Third, we will upgrade the product structure and foster new growth drivers for trade. We will consolidate our traditional strengths. Meanwhile, as China's industries move towards a medium-high level, we will continue to nurture new areas of trade growth during this process. Among the three new leading industries that have been frequently mentioned, automobiles, especially new-energy vehicles, as well as lithium batteries and photovoltaic products, have made an impressive performance in exports. They have experienced rapid export growth and developed a new growth driver. We will also support localities in exploring the organization of the digital trade expo, accelerate the construction of a digital pilot zone for global trade in the Guangdong-Hong Kong-Macao Greater Bay Area and continue to improve trade digitization, providing more growth drivers for trade.

To conclude, we face a challenging situation this year but have strong confidence. We will fully implement the guiding principles of the 20th CPC National Congress and make efforts to stabilize trade volume and improve trade structure. At the same time, we will hear the opinions and demands of business entities and formulate targeted policies and measures to enable better development of enterprises on the international market. Thank you.