It all started rosy, things were looking positive for China at the beginning of the year. China and the U.S. reached a phase-one deal to ease trade tensions between the world’s two largest economies. But there was no time to celebrate when an unprecedented virus outbreak enveloped the planet.
Borders were closed, factories shut, people stayed at home and cut back their expenditures, sending global trade into a tailspin. The WTO (World Trade Organisation) forecasted that global trade would fall between 13 and 32 percent this year.
Roberto Azevedo, WTO Director general, had said: “The decline is historically large – in fact, it would be the steepest on record.”
China was the epicentre of the outbreak, and the country moved quickly to contain the crisis. After a painful couple of months with trade contracting close to 10 percent in January and February, foreign trade started to recover in March -0.8 percent.
However, in the second quarter, trade faced more external headwinds, as the COVID-19 crisis began ravaging global markets. April and May’s foreign trade contracted 0.7 percent and 4.9 percent, respectively.
But China moved quickly to counter the pressure.
Today, government official data released today showed China’s foreign trade numbers swinging back to a 5.1 percent year on year growth in June, in yuan terms. Exports and imports were up 4.3 percent and 6.2 percent respectively.
There are several trends worth noting.
First: Diversification, Specifically in Terms of Trade Partners
Earlier, ASEAN surpassed the EU to become China’s biggest trading partner in the first quarter of the year, rising 6 percent and accounting for 15 percent of China’s trade in the first three months. Trade with Belt and Road member nations was another bright spot, rising 3.2 percent in the first quarter of this year, bucking an overall slide of 6.4 percent.
Zhou Xin, executive director of the Volatility Institute of the New York University Shanghai, told CGTN: “Not only are we close to each other geographically (China and ASEAN) and our diversified portfolio of trade partners will help reduce international trade risks.”
Second: Going Online
Technologies such as teleconferencing, VR, and live streaming are reshaping the way foreign trade companies do business. That was evident earlier this year when the six-decades-old Canton Fair went online. For the first time, nearly 26,000 exhibitors showcased their products on the internet while more than 8,000 used live-streaming services.
Third: China’s Ongoing Opening Up
Despite rising nationalism and de-globalisation waves, China continued to push ahead with more opening-up policies to facilitate the flow of essential goods and services. China also lowered tariffs, cut red tape, shortened its negative list, and stepped up the construction of free trade zones, including one in Hainan.
These measures have helped China avoid a sharp downturn and stabilised its trade in the face of an unprecedented crisis.