When talking about the development of foreign trade this year, Premier Li Keqiang’s government work report on the 5th did not put forward specific numerical indicators, but replaced it with “imports and exports stabilized and improved”. This not only indicates that the development of foreign trade will be heavier this year, but also reveals that the government attaches more importance to the cultivation of export competitiveness.

 

To take stock of the major expected targets of economic and social development proposed in the 2015 government work report, only the growth rate of imports and exports is far from reaching the target. China's exports in 2015 shrank by 2.8% in US dollars, the first annual decline since 2009. Affected by sluggish external demand and falling import and export prices, the country’s total import and export value in January was 1.88 trillion yuan, down 9.8% year-on-year; exports were 1.14 trillion yuan, down 6.6%. This makes the market feel pressure again. How to correctly view China's export situation and evaluate the competitiveness of China's manufacturing industry has become the focus of public opinion.

 

China's trade in goods still ranks first in the world

 

 "Foreign trade is a trade between countries and must be compared in the international context. A comprehensive comparison of multi-dimensional indicators such as quality and quantity is required." said Lu Xun, deputy director of the Department of Foreign Trade of the Ministry of Commerce.

 

From an international perspective, last year's global trade experienced double-digit negative growth. China's export growth rate is still better than that of major global economies and emerging market countries. The decline rate is much lower than that of major trading partners and global trade. The export value still ranks first in the world, which is also the position that has been maintained for three consecutive years since 2013. my country's share in global trade has increased by one percentage point from 12.2% to more than 13%, which is the fastest year for my country to increase its global share.

 

In January, my country's foreign trade imports and exports continued to decline. But what needs to be seen is that the imports and exports of the world's major economies have declined, and most of them have fallen by more than 10%. It should be said that from the perspective of global trade and economic development, my country's foreign trade in January continued the momentum of 2015.

 

"We are accustomed to high growth, not accustomed to negative growth, and believe that negative growth is a problem. In fact, global trade was in negative growth in 2015. Recently, the World Trade Organization announced the import and export data of 71 major economies in 2015. Exports fell by 11%. A decrease of 12.6%." Gao Hucheng, Minister of Commerce, said. He believes that in 2015, China’s foreign trade still submitted a satisfactory answer-when global trade is growing, China’s growth rate is higher than other major economies; when global trade is declining , China's decline is the lowest.

 

According to WTO statistics, from January to November 2015, the United States (-6.8%), Germany (-11.2%), Japan (-9.4%), South Korea (-7.4%), Hong Kong (-3.1%), India (- 17.5%), South Africa (-9.5%), Brazil (-16.0%) and other countries and regions have negative growth, which is 0.6 to 15 percentage points higher than our export decline (-2.5%). From January to November 2015, my country's imports and exports were US$56.6 billion more than that of the United States, of which exports were US$667.2 billion more than that of the United States.

 

"In 2015, the contribution rate of China's economy to global economic growth was over 25%. Against the background of the continued downturn in global trade, China's foreign trade imports and exports are still significantly better than other major economies in the world, which itself is a global trade and even global economy. "An important contribution to development." Gao Hucheng said, "We should also adjust our thinking. China's foreign trade has indeed reached the stage where traditional industries need to improve quality and efficiency, and new industries need innovation and development. There is also a speed change in this, which is also our quality improvement. A hurdle that efficiency and innovation must pass."

 

"Made in China" competitiveness continues to increase

 

China's share in the world market continues to grow. This shows that global demand is weak, not that China lacks competitiveness. The impact of demand on exports often has a strong periodicity, and the impact of changes in the competitiveness of domestic exports on exports often has a strong trend. For a long time, export volume has received more attention than export competitiveness. However, the export volume cannot answer the question of whether the slowdown in export growth is affected by short-term shocks such as reduced external demand or a long-term trend of weaker competitiveness. It is also difficult to judge and adjust industrial and trade policies based on this. So, in addition to market share, what other indicators can reflect the export competitiveness? Is the export competitiveness of Chinese manufacturing continuously improving?

 

Let's look at a set of data:

 

From the perspective of trade methods, my country's general trade exports maintained growth in 2015 and have become the main force driving exports. In 2015, general trade exports were US$1217.3 billion, an increase of 1.2%, accounting for 53.5% of foreign trade exports, an increase of 2.1 percentage points from the same period in 2014; processing trade exports were US$797.8 billion, a decrease of 9.8%, accounting for 35% of foreign trade exports, compared with the same period in 2014 Down 2.7 percentage points.

 

In terms of main products, my country's exports of mechanical and electrical products maintained growth in 2015, and the product structure was further optimized. In 2015, exports of mechanical and electrical products were US$13,119.3 billion, an increase of 0.1% year-on-year, accounting for 57.6% of foreign trade exports, an increase of 1.8 percentage points over the same period in 2014. Among them, exports of mobile phones, ships, lamps and lanterns increased by 8.5%, 13.3% and 15% respectively. The seven categories of labor-intensive products such as textiles, apparel, and shoes exported a total of US$472 billion, down 2.7% year-on-year, and accounted for 20.7% of foreign trade exports.

 

From the perspective of major markets, my country's export market diversification has made progress, and exports to countries related to the “Belt and Road” have maintained growth. my country’s share in the United States, the Eurozone, the United Kingdom and Japan remained stable, with exports to the United States increasing by 3.4% and exports to ASEAN increasing by 2.1%. Exports to India, Thailand, Vietnam and other countries increased by 7.4%, 11.7% and 3.8% respectively.

 

From the perspective of business entities, private enterprise exports have maintained growth and become the main force of exports. In 2015, private enterprises exported US$1029.5 billion, an increase of 1.8% year-on-year, accounting for 45.2% of foreign trade exports, an increase of 2.1 percentage points from the same period in 2014.

 

Shen Danyang, a spokesman for the Ministry of Commerce, said that my country's foreign trade structure adjustment trend is improving, enterprises are willing to transform and upgrade, and new momentum for foreign trade development is accumulating.

 

Bloomberg economist Chen Shiyuan also wrote that China's market share in many emerging economies increased in 2015, while also maintaining its market share in developed economies. Chinese exports are highly concentrated in manufacturing. China has maintained the competitiveness of its core products, and its main manufactured products have maintained their advantages over other countries. And China's export composition has become more diversified and complicated, providing a buffer for negative shocks.

 

According to the economic complexity index compiled by Harvard University to measure the diversity and complexity of a country’s exports, China ranked 19th globally in 2014, a significant increase from 39th in 2005 and 48th in 1995. China ranks higher than most emerging market countries on this list. However, given that China still lags behind most advanced economies, this means that there is still room for further upgrades and diversification of export commodity baskets.

 

The key to export competitiveness lies in industrial competitiveness

 

Production cost, trade cost, production efficiency and real exchange rate are the main factors that determine export competitiveness. What are the reasons for the continuous improvement of China's foreign trade competitiveness?

 

Gao Hucheng, Minister of Commerce believes: First, China's industrial system is very complete, the industrial chain is very long, and its supporting capabilities are strong. Second, China has a strong innovation capability. Since the international financial crisis in 2008, Chinese companies have taken the initiative to adjust. Our investment in education ranges from the country to the family. In addition, the innovative spirit is also a very strong competitiveness in China. The third is the development of emerging formats, including the transformation of traditional industries, as well as the innovation of emerging formats, such as Hangzhou’s cross-border e-commerce pilot, which added US$10 billion in exports that year. Fourth, the government vigorously simplifies government and decentralization, cleans up various taxes and fees, improves work efficiency, creates a convenient, efficient, and rule-of-law business environment for enterprises, reduces the burden on enterprises, and solves the problems of difficult and expensive financing for enterprises A lot of strength.

 

Of course, what needs to be seen is that my country’s foreign trade has been growing at a high speed for 30 years and is gone. In the new era, my country's foreign trade development is undergoing a series of new trends in terms of external demand, competitive advantages, and trade structure. In the past, our comparative advantages and international competitiveness mainly relied on relatively low labor costs. However, capital-intensive electromechanical and large-scale equipment are growing at a faster rate, indicating that the comparative advantage of my country's manufacturing industry is changing.

 

Researcher Bai Ming of the Research Institute of the Ministry of Commerce believes that the upgrading of foreign trade depends more on the upgrading of industries. This is a gradual process and cannot be accomplished overnight. my country's high-speed rail and nuclear power have made breakthroughs in the "going global" process, and the export competitiveness of Chinese-made products is improving. But it should also be noted that there is still a huge gap between its competitiveness and the standards of a trading power. In general, my country's foreign trade development mode is undergoing a transformation, relying more on technology, brand, service and other comprehensive competitiveness to promote exports. We must not only vigorously develop and optimize the trade structure and e-commerce, but also continue to promote industrial upgrading in combination with current mass entrepreneurship and innovation. Among them, there is huge room for improvement in labor-intensive industries such as clothing and fabrics.

 

In 2016, the domestic and international situation facing China's foreign trade was very complicated and severe, and the downward pressure was still great. Economists generally predict that China's exports this year may continue to surpass the world, but due to global demand factors, the market facing Chinese goods will only grow at a moderate rate.

 

In this year's government work report, it is proposed to solidly promote the construction of the “Belt and Road”, expand international production capacity cooperation, and promote the innovation and development of foreign trade. These are all conducive to improving the quality and efficiency of my country's foreign trade and achieving stability. We must base ourselves on the present and take a long-term perspective, and accelerate the transformation of the power of foreign trade structure adjustment.