Recently, the General Department of the Ministry of Commerce and the Institute of International Trade and Economic Cooperation jointly released the Report on China's Foreign Trade Situation (autumn 2018). The report reviews the operation of China's foreign trade in the first three quarters of 2018, and looks forward to the development trend of China's foreign trade in the whole year of 2018 and in 2019. Data show that China's exports to the United States have not declined, but increased.
Sino-US trade continues to grow
In the first three quarters, China's total import and export of goods in RMB was 22.28 trillion yuan, an increase of 9.9% over the same period last year. Among them, exports increased by 6.5% to 11.86 trillion yuan, imports by 10.43 trillion yuan, an increase of 14.1%, and surplus by 1.43 trillion yuan, a narrowing of 28.3%. The total export of seven categories of labor-intensive products, such as clothing and toys, was 2.29 trillion yuan, down 0.8% year on year, accounting for 19.3% of the total export.
The report stresses that the current economic and trade frictions between China and the United States have limited impact and the overall risk can be controlled. In the first three quarters, China's imports and exports to the United States amounted to 3.06 trillion yuan, an increase of 6.5%, accounting for 13.8% of China's total foreign trade. The United States remains China's second largest trading partner. Among them, China's exports to the United States amounted to 2.27 trillion yuan, an increase of 7.4%, and its imports from the United States amounted to 79.81 billion yuan, an increase of 3.8%. According to the data, Sino-US trade still keeps growing.
The export situation in the textile and garment field basically coincides with the overall situation. According to the Customs Express, China's textile and apparel exports from January to September (excluding 94 chapters) amounted to $207.77 billion, an increase of 4.6% over the same period last year, an increase of 3.7 percentage points over the same period last year, and a further acceleration of 1.3 percentage points over the first half of this year.
According to the latest data, the export volume of textiles and apparel in October totaled 23.257 billion US dollars, an increase of 7.33% (11.57% in RMB). Among them, textile exports increased by 5.88% (10.04% year-on-year increase in RMB) in the same month, while apparel exports increased by 8.4% (12.70% year-on-year increase in RMB) in the same month, which maintained the growth trend since the second half of the year.
From January to October this year, China's textile and apparel exports totaled 230.805 billion US dollars, an increase of 4.77% over the same period last year (0.48% in RMB). Among them, textile exports totaled 98.972 billion US dollars, an increase of 9.91% (RMB 5.2% year-on-year), a decrease of 0.54% from January to September, a slight slowdown; garment exports totaled 13.134 billion US dollars, an increase of 1.22% (RMB 2.79% year-on-year decline).
In the export market, the export volume of textiles, raw materials and textiles and clothing in the US, EU and Japan increased by 8.5%, 3.4% and 4.8% respectively over the 1~9 months. The growth rate of exports to the United States increased by 9.1 percentage points over the same period last year. Exports to the countries along the "one belt and one road" along Vietnam, Turkey, Indonesia and other countries grew well. The ratio increased by 30%, 5.7% and 21.6%.
According to the analysis of China's Foreign Trade Situation Report (autumn 2018), the growth mainly comes from the following factors. One is the growth of domestic market demand in the United States. Since 2018, the U.S. economy has maintained relatively rapid growth, the unemployment rate has dropped to a new low in decades, the ability of residents to consume confidence has increased, the confidence of enterprises to invest has risen, and the domestic market demand is generally strong, which has led to the rapid growth of demand for imported goods. In the first eight months, U.S. merchandise imports grew by 9.5% year-on-year, an increase of 3 percentage points over the same period in 2017. Accordingly, the demand for imports of Chinese goods in the US market is also expanding.
Second, the industrial chain between China and the United States is closely linked. Overall, China has a complete industrial chain, strong manufacturing capacity, high cost-effective products, advanced science and technology, rich resources, high per capita income level in the United States, strong complementarity of bilateral economic structure, and many trade opportunities. Market choice has enabled the two countries to form a "you have me, I have you" interest pattern. Especially for American consumers, Chinese goods are of high quality and low price, and they are the first choice of consumer goods.
Third, the import and export enterprises fulfill the contract. In international trade, there will be months or even longer lag between the signing of contracts and the actual import and export. After the United States imposed tariffs on Chinese goods, most of the contracts previously signed by enterprises of both sides continued to be fulfilled, making import and export data basically stable. Especially in order to prepare for the sales in the fourth quarter of the peak consumption season, the enterprise prepares the goods in advance, which plays a supporting role in bilateral trade.
According to the report, the current international market demand is relatively stable, domestic import demand is growing steadily, and China's foreign trade has the basic conditions to maintain a steady growth. The rapid growth of imports and exports in the first three quarters has provided a strong support for the year-round growth of foreign trade. However, the high import and export base in the fourth quarter of 2017 will have a negative impact on the growth of import and export in the fourth quarter of 2018.
The report points out that in 2019, China's foreign trade development is facing more severe and complex environment, increasing downside risks in the world economy, and protectionism threatens stable growth of global trade. At present, China's foreign trade development is in good fundamentals and the policy environment is constantly improving, which contains new development potential. We should actively cultivate new trade patterns and strive to maintain stable development of foreign trade and improve its quality.
How does the barometer react?
As for the situation in 2019, the Canton Fair, which has always been called the barometer of import and export trade, reminds exporters that Sino-US trade frictions still bring great uncertainty to Sino-US bilateral economic and trade relations and even the whole world.
The 124th Canton Fair ended on November 4. According to statistics, the total export turnover of this Canton Fair was 206 billion 494 million yuan (equivalent to 29 billion 860 million US dollars), down 1% compared with the same period last year, and the volume of exports to the US decreased by 30.3% compared to the same period last year, to 2 billion 790 million US dollars.
Photo Source: Internet Text Source: China Textile Online