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Resilience in China’s foreign trade will still sustain Asia as the hub of global trade

Views: 12     Author: Site Editor     Publish Time: 2022-11-29      Origin: Site

For years, Asia has been the primary global trading hub.According to the United Nations Conference on Trade and Development (UNCTAD),in 2021,North America accounted for 10.13 percent of global export trade,Europe accounted for 37.16 percent,and Asia accounted for 42.97 percent.Therefore,while Asia is the most important stabilizer of global trade,China is the anchor of this stabilizer.In 1980, China accounted for only 3.6 percent of total Asian exports,and by 2021,China's share of Asian exports rose to 35.1 percent. China's foreign trade matters a lot to the stability of Asian trade and even of the global trade(more details of the products please click the link Products).

According to the latest WTO estimates,as multiple shocks weigh on the global economy,world merchandise trade volumes are anticipated to lose momentum in the second half of 2022 and remain subdued in 2023 with only a 1 percent increase - down sharply from the previous estimate of 3.4 percent in April.

China's foreign trade in 2022 is also volatile.According to the General Administration of Customs of China,in the first seven months,China realized a year-on-year increase of 10.4 percent in total trade and 14.7 percent in export. In July alone,China's export reached a year-on-year growth rate of 17.9 percent. However,in August,China's export growth rate fell from July's 17.9 percent to 7.1 percent.Due to a slowdown of its GDP growth rate,worries of an "inflection point" and pessimism in China's trade resilience began to rise.

In fact,one cannot judge whether a country's trade has long-term resilience only by studying the data in one or two months.One also needs to look at the long-term development trends of international trade and the structural changes in this country's foreign trade.If a country can take advantage of the new trends of global trade and continue to gain new competitiveness and impetus,even if the trade data fluctuates due to short-term shocks,it won't affect the resilience of the long-term development sustained by its economic fundamentals.From the perspective of the long-run development of global trade,at least two major trends are worthy of attention.First, since the outbreak of the 2008 global financial crisis, the growth of trade in goods has gradually lost momentum,while trade in services has entered a period of rapid growth.Besides, the share of goods trade based on labor-cost arbitrage has been declining over the last decade due to replacement of labor by automation worldwide.Second, global value chains are being reshaped by both geopolitical and technological forces. As the report "Globalization in Transition:The Future of Trade and Value Chains" released by Mckinsey Global Institute in 2019 shows,"goods-producing value chains (particularly automotive as well as computers and electronics) are becoming more regionally concentrated,especially within Asia and Europe."Regional and even domestic production networks are gaining more strength due to the potential risks of global supply chains exposed by the outbreak of the COVID-19 pandemic.The fact that China has a huge market of 1.4 billion people with a growing income,the world's most hard-working labor force who yearn for a better life, a large number of science and engineering students and engineers, the world's most efficient infrastructure and the most complete industrial system, and an ever-improving business environment,has provided solid economic fundamental support for China's foreign trade to continuously consolidate the industrial foundation,enhance the momentum and improve the market penetration.As a matter of fact,by actively conforming to the new trends in global trade development, China's foreign trade has become even more resilient in the process of long-term structural transformation.Let the data tell the truth.


      

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