Opportunities and Challenges of China’s Foreign Trade in 2024

“In the first two months of this year, imports and exports reached 6.61 trillion yuan, a record high for the same period. This scale is basically equivalent to the total annual foreign trade value of China 20 years ago, and two months is equivalent to one year.” Wang Lingjun, deputy director of the General Administration of Customs, introduced the “good start” of foreign trade data this year.

On March 26, the State New Office held a press conference on the recent production, consumption, import and export data and policy situation, Wang Lingjun introduced that in January and February this year, exports increased by 10.3%, imports increased by 6.7%, “double growth” not only reflects the continued recovery of China’s economic development, but also provides a broad market space and cooperation opportunities for enterprises in all countries. Despite the complexity, severity and uncertainty of the current external environment, there is a basis and conditions for China’s foreign trade to continue to improve, and we are confident in achieving “quality and quantity stability” in foreign trade throughout the year.

Vice Minister of Commerce Guo Tingting said that in 2024, more efforts are needed to promote the steady growth of foreign trade quality. At present, the Ministry of Commerce is paying close attention to studying a new round of stable foreign trade policies and measures, striving to introduce and implement as soon as possible, and achieve results as soon as possible, fully consolidate the basic foreign trade and foreign investment, and strive to complete the annual target tasks.

Foreign Trade Hit a Record High in the First Two Months

Guo Tingting said that China’s foreign trade has achieved a solid start this year. In the first two months, the import and export of goods reached 6.6 trillion yuan, an increase of 8.7%, a record high for the same period, and the growth rate was about 7 percentage points higher than that in the fourth quarter of last year. Exports and imports increased by 10.3% and 6.7%, respectively.

Data from the Ministry of Commerce show that in the first two months of this year, China’s import and export to countries jointly building the Belt and Road increased by 9.0%, while exports to the United States and the European Union increased by 8.1% and 1.6% respectively. At the same time, the proportion of private enterprises increased. The import and export of private enterprises increased by 17.7%, and the proportion of total foreign trade increased by 4.2 percentage points over the same period last year, reaching 54.6%, becoming the main force of foreign trade development.

In Wang Lingjun’s view, there are three optimization of China’s foreign trade structure at present. First, the market pattern has been optimized. While the development of emerging markets has accelerated, the traditional markets have also maintained good performance. Second, regional opening-up was optimized. The eastern coastal region continued to play the role of “stabilizer”, and the imports and exports of nine provinces and regions along the border increased by 25.4 percent to neighboring countries. Third, product structure optimization, traditional advantages of products full of new vitality, new quality productivity gave birth to new momentum, effectively consolidated the basic plate of foreign trade. Among them, in the first two months, exports of high-end machine tools, ships and Marine engineering equipment, and aerospace equipment increased by 34.5%, 61.3%, and 17.7% respectively.

It is worth noting that the improvement of foreign trade has also led to the continuous improvement of industrial development. Data from the National Bureau of Statistics show that from January to February, the value of industrial exports above designated size increased by 0.4% from a year-on-year decline of 3.2% in December last year, ending the previous eight consecutive months of decline. Among the top 10 export industries, eight industries’ export growth accelerated or the decline narrowed from December last year.

In addition, new models and new platforms have also led to the improvement of foreign trade. Wang Lingjun said that in the first two months, cross-border e-commerce imports and exports increased by nearly 10%, and market procurement exports increased by 15.9%. With the blessing of the new model, high-quality products at home and abroad can achieve two-way access more conveniently and efficiently to meet the diversified needs of consumers at home and abroad. At the same time, the level of institutional opening-up has been improved, and the demonstration and leading role of high-level open platforms has become prominent. In the first two months, imports and exports in 22 pilot free trade zones increased by 11.7 percent. Among them, the import and export growth rate of Guangdong, Jiangsu, Sichuan and Hebei pilot free trade zones exceeded 30%. The construction of Hainan Free Trade Port continued to advance, and the import and export volume increased by more than 20% in the first two months.

However, WTO Director-General Iweala recently publicly said that the growth rate of global trade in 2024 May not be as high as the previously expected 3.3%. Several international organizations also forecast that global economic growth in 2024 will be lower than the historical average. The World Bank expects global trade to grow at only half the average rate of the decade before the pandemic.

Guo Tingting reminded that the external situation facing China’s foreign trade is still very severe. The recovery momentum of external demand is still unstable, and risk factors are also increasing, with geopolitical conflicts and “super election year” bringing more variables. Trade restrictions are also increasing, protectionism and unilateralism are escalating, seriously disrupting the stable operation of the global industrial chain and supply chain, and bringing interference and obstacles to foreign trade enterprises to explore the international market.

“In 2024, to promote the stability of foreign trade quality, we need to overcome difficulties and make more efforts.” Guo Tingting said that at present, the Ministry of Commerce is paying close attention to studying a new round of stable foreign trade policies and measures, striving to introduce and implement as soon as possible, and achieve results as soon as possible, fully consolidate the basic foreign trade and foreign investment, and strive to complete the annual target tasks.

We will foster new growth drivers and expand new growth areas
“This year, we will make every effort to achieve the task goal of” quality improvement and stable quantity “of foreign trade, and the focus of our work is to cultivate new momentum and expand new growth points.” While promoting innovation and upgrading of foreign trade industries and supply chains, we will also deepen cooperation with trading partners to add impetus to international trade and global economic growth.” Some considerations are put forward for the specific stabilization of foreign trade.

In terms of deepening international cooperation in the foreign trade supply chain, Guo Tingting said that the Ministry of Commerce will focus on the whole process of the supply chain, and deepen the whole chain and systematic cooperation from raw materials, semi-finished products to finished products with willing trading partners. We should adhere to the general direction of economic globalization and build mutually beneficial and win-win trade partnerships in light of the needs of industrial development of various countries.

At the same time, the Ministry of Commerce will focus on processing trade, focusing on the two keywords of “upgrading” and “gradient transfer”, focusing on optimizing the industrial chain and upgrading the value chain, implementing various policies and measures on improving the development level of processing trade, promoting the healthy development of new business formats such as bonded maintenance, and promoting the landing of a new batch of bonded maintenance pilot projects, making good use of the processing trade online docking platform. Strengthen industrial exchanges and cooperation, and cultivate high-quality gradient transfer carriers.

In terms of trade digitalization, the Ministry of Commerce will rely on platforms such as the Guangdong-Hong Kong-Macao Greater Bay Area Global Trade Digitalization Pilot Zone, Shanghai Pilot Free Trade Zone, and foreign Trade transformation and Upgrading Base, as well as pilot projects in Beijing, Chongqing, Shenzhen and other places to accelerate the promotion and application of electronic trade documents. In the subsequent FTA negotiations, we will also actively promote the inclusion of relevant provisions for paperless trade and electronic trade documents.

In terms of green trade development, the Ministry of Commerce will actively guide the green and low-carbon coordinated transformation of foreign trade supply chains, build a public service platform for green trade development, support enterprises to research and develop various green and low-carbon products, consolidate and enhance the export competitiveness of competitive products, support green ships to explore the international market, and expand international economic and trade cooperation in the green field.

At the same time, it is also crucial to accelerate the development of new forms of foreign trade. According to the data of the Ministry of Commerce, in 2023, China’s cross-border e-commerce imports and exports will reach 2.38 trillion yuan, an increase of 15.6%, accounting for 5.7% of foreign trade imports and exports, and has become an important force for the development of China’s foreign trade.

“This year, in response to the problems and difficulties reflected by the industry, we are actively studying and will issue implementation opinions to support the development of cross-border e-commerce as soon as possible.” Guo Tingting said that the next step will be to expand cross-border e-commerce exports, continue to improve supporting policies, solidly promote the construction of cross-border e-commerce comprehensive pilot areas, organize special actions such as brand cultivation, organize special training, strengthen capacity building, and support foreign trade enterprises to expand sales channels and cultivate their own brands through cross-border e-commerce. At the same time, the Ministry of Commerce will continue to improve the layout of overseas warehouses, which is a new type of foreign trade infrastructure. At present, we have more than 2,500 overseas warehouses. We will support foreign trade enterprises and logistics enterprises to make good use of these overseas warehouse resources and enhance the level of specialization, scale and intelligence.

Wang Lingjun said that the General Administration of Customs will better serve foreign trade through “a combination of” policies such as “one increase, one decline, one excellent and one strong”.

Specifically, “increase” means to increase convenience and improve the level of trade facilitation, including vigorously promoting the construction of smart customs, improving the customs clearance efficiency of the whole chain of imports and exports, expanding the “single window” function of international trade, and accelerating the international mutual recognition of “Certified operators” (AEO).

“Reducing” means reducing costs and helping enterprises reduce burdens and fees. We will fully release the policy dividends of RCEP and other free trade agreements and proactive disclosure, raise the level of benefits enjoyed by enterprises, and continue to regulate the charging behavior of import and export links, so as to help enterprises reduce costs and improve their sense of gain.

“Excellent” means excellent service and optimizing the business environment at the port. The General Administration of Customs will consolidate the good experience of “the chief of the Customs policy to the door” and “zero enterprise problems”, introduce more “one enterprise one policy” and “one industry one policy” policy measures in due time, and go all out to help enterprises expand the market and seize orders through the re-strengthening of policy measures, and respond to the uncertainty of foreign trade situation with the certainty of customs supervision services.

“Strong” means strong innovation and fostering new growth drivers for foreign trade. We will continue to focus on supporting the construction of open platforms, support the development of new business forms such as cross-border e-commerce and bonded maintenance, vigorously carry out innovation in the customs supervision system, and stimulate new momentum and shape new advantages of foreign trade with new models of supervision services.

“In the first two months, the average daily number of inbound and outbound transport vehicles under customs supervision increased steadily compared with the end of last year, of which the number of inbound and outbound aircraft under supervision increased by nearly 10%.” If you go to the port of entry, you will see the scene of heavy traffic, people and goods. Despite the complexity, severity and uncertainty of the current external environment, there is a basis and conditions for China’s foreign trade to continue to improve, and we have confidence and confidence in achieving a stable quality and quantity of foreign trade for the whole year.” Wang Lingjun said.

The Export of Ferroalloys in 2024

Ferroalloy is a product that is added to molten iron as a deoxidizer or element additive in steelmaking to make steel have certain characteristics or meet certain requirements. China is one of the world’s largest ferroalloy producers and exporters, and its export situation is affected by a variety of factors, the following is some analysis of China’s ferroalloy export situation in 2024:

  • International market demand: The international market demand for ferroalloys will directly affect China’s export volume. Factors such as global economic growth, the development of the steel industry and infrastructure investment will have an impact on the demand for ferroalloys.
  • Trade policies and barriers: Changes in trade policies and the setting of trade barriers may have an impact on China’s ferroalloy exports. For example, trade frictions, tariff adjustments, anti-dumping measures, etc., can lead to export restrictions or increased costs.
    Environmental policy: The Chinese government’s requirements for environmental protection are increasingly strict, and the ferroalloy industry is also facing environmental pressure. The improvement of environmental standards may lead to the elimination of some small, highly polluting ferroalloy enterprises, thus affecting the overall export volume.
  • Domestic production costs: raw material prices, energy costs, labor costs and other factors in ferroalloy production will affect the production costs of enterprises. If domestic production costs rise, it may weaken the competitiveness of China’s ferroalloys in the international market.
    Technological innovation and quality improvement: Continuous technological innovation and product quality improvement will help Chinese ferroalloy enterprises to remain competitive in the international market and meet customer demand for high-quality products.
    Competition for alternative materials: In some applications, alternative materials for ferroalloys may appear, which may have a certain impact on the demand for ferroalloys.

According to the data of China’s ferroalloy export amount from January to February 2024, it fell by 25.0% year-on-year, which may be related to international market price fluctuations, trade barriers and other factors. However, with the recovery of the global economy and the improvement of the trade environment, it is expected that the export amount of ferroalloy will gradually pick up.

To accurately predict China’s ferroalloy export situation in 2024, it is necessary to pay close attention to the global economic situation, trade policy changes and the dynamics within the industry. At the same time, enterprises should also strengthen market research and improve product quality to adapt to changes in market demand.

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