In spite of all the clamor about boosting domestic consumption as the main driver of growth, and the endeavors to that effect, foreign trade, export-oriented processing in particular, remains a crucial, indispensable cornerstone of China’s economy.
With the novel coronavirus still continuing to disrupt normal life and production at home, stimulating consumption remains difficult.
Supporting the foreign trade sector, therefore, is of crucial importance. The Ministry of Commerce’s new round of support for the foreign trade sector, announced on Tuesday, is an opportune move in the right direction. If soundly implemented the measures will have a tremendous impact on the well-being of numerous foreign trade businesses and their employees, and the broader economy.
For all the negative variables affecting the import and export businesses over the past few years, most noticeably pandemic-related disruptions at home and abroad, geopolitical shocks to global industry and supply chains, and inflation-induced withering demand, Chinese foreign trade has appeared to be a rare bright spot in the generally bleak global economic landscape. The decent 10.1 percent growth in imports and exports the country witnessed in the first eight months of 2022 has reinforced belief in the Chinese economy’s “strong resilience and vitality”.
Optimism, however, must be tempered as there are multiple signs indicating that there may be even tougher times ahead for the world economy going forward, which will inevitably dampen China’s foreign trade. International foreign trade monitors have issued clear warnings about a decline in global demand for Chinese goods. The cost of shipping goods from China has reportedly dropped to the lowest level in more than two years, as a result of shrinking demand.
While geopolitical factors such as the United States’ efforts to oust China from global supply chains remain largely negligible, the confluence of various headwinds devastating developed and developing economies alike, including but not limited to widespread inflation, currency policies and the shocks from the ongoing conflict between Russia and Ukraine, will not leave China unscathed.
The latest initiative of the Ministry of Commerce seeks to spur foreign trade through reducing the obstacles to foreign trade caused by the epidemic restrictions, facilitating online transactions, and improving customs and ports services.
While bureaucratic red tape has been a longstanding hurdle for foreign trade businesses, the chokepoints it has cultivated over decades have become even more of a hindrance in such a difficult time.
The new package of measures unveiled shows awareness of the domestic factors troubling foreign businesses, and hopefully, all the policies prescribed will be carried out faithfully so they can bear the intended fruit. Whether they can deliver the promised dividends, however, hinges on the removal of the obstacles local authorities have erected in the name of epidemic prevention and control.
Editorial, China Daily
