Guideline notes country should boost services trade, innovation
China is seeking to boost its trade ties with economies along the new "silk roads" linking Eurasia and Africa, as trade with these countries and regions have become a new engine of China's overall lackluster trade growth, an official of the Ministry of Commerce (MOFCOM) said Wednesday.
China has seen rapid growth in the past years in its trade with economies along the "One Belt, One Road" routes, Zhi Luxun, deputy director-general of MOFCOM's Department of Foreign Trade, told reporters on Wednesday.
Trade volume in goods with the 64 economies along the routes, many of which are developing countries, has been growing by an average of 22.2 percent each year since 2001, 4.4 percentage points higher than China's average trade growth during the period, Zhi said.
Total trade volume with economies along the routes in 2014 accounted for 26 percent of China's total trade, up from 16.2 percent in 2001, he said.
The "One Belt, One Road" initiative, referring to the Silk Road Economic Belt and the 21st Century Maritime Silk Road, was first proposed by President Xi Jinping in 2013. In March this year, a detailed plan was released by the Chinese government to facilitate communication and cooperation along the route.
"After China raised the concept of the 'One Belt and One Road,' many countries along the routes responded very positively, some of them have already been linking the initiative with projects of their own countries," said Zhi.
China encourages industries such as power, transport, automobile and heavy machinery to invest in the countries along the routes, so as to upgrade local industries and create jobs, Zhi said.
In a guideline released on May 12 aiming to boost trade, the "One Belt, One Road" initiative has been highlighted as an important opportunity for China to boost its trade and upgrade the trade structure.
The guideline also noted that the country should boost the services trade and focus more on quality and innovation as the new driving forces for trade growth.
The guideline, along with a series of pro-trade measures released earlier, is designed to help the country's exporters combat the current downward pressure amid unfavorable factors like dismal external demand and rising labor costs.
Zhi said that the commerce ministry and some other government authorities will roll out detailed action plans to facilitate trade based on the guideline.
In the first four months of the year, China's foreign trade reached 7.5 trillion yuan ($1.2 trillion), down 7.3 percent from the same period last year. Exports grew slightly at 1.8 percent while imports dropped as much as 17 percent, according to customs data.
In April alone, total trade volume declined 10.9 percent over the previous year to 1.96 trillion yuan, with exports declining 6.2 percent and imports dropping 16.1 percent, customs data showed.
"These support measures [from the government] will help boost trade growth … and the 'Belt and Road' initiative will also gradually show its effects," Liu Xuezhi, an expert at the Bank of Communications, told the Global Times on Wednesday.
Besides, the emerging cross-border e-commerce will also serve as a tool to facilitate trade, as it can help exporters reach out to potential customers, Liu said.
Experts said that trade may rebound in the second and third quarters, but trade growth will remain at a low- to mid-level for some time. And it will be hard for the country to reach the 6 percent trade target this year.
He Weiwen, co-director of the China-U.S.-EU Studies Center at the China Association of International Trade, said that the drop in international commodity prices has partly contributed to the sharp decline in China's imports, as commodities account for a large chunk of China's imports.
"China should further encourage imports of advanced technologies and key equipment which can balance trade and also benefit the country's economic restructuring," He told the Global Times on Wednesday.
Zhi said that there are some "bright spots" in China's trade, and "we believe that China's trade activity for the rest of the year will improve."
China is set to lower import duties on major consumer goods like clothing and cosmetics by over 50 percent on average starting June 1. The move could help boost imports and spur consumption in China, as many Chinese now prefer to shop overseas because of lower prices, He said.
