The Future Orientation of China's Foreign Trade

Some thoughts on the current development of China's foreign trade and its surplus

Foreign trade is the core of the world's foreign economic relations between countries in the economic development of countries play an irreplaceable role, is an important means of accelerating the economic development of countries. Since the reform and opening up, foreign trade has been China's economic development "propeller", import and export from the original deficit to surplus, abundant foreign exchange reserves as China's economic and social development of the "pill". With the large trade surplus, but also brought some new problems, caused by the relevant parties concerned. Customs statistics is an important part of the national economic statistics, from an import and export declarations accumulated, audited, statistics, its accuracy and authority internationally recognized. By comparing and analyzing the customs statistics, we can have a clearer understanding of China's foreign trade development and trade surplus.

One, since the reform and opening up, China's foreign trade has always maintained a good momentum of development, a powerful impetus to the healthy and rapid development of the national economy

Since the reform and opening up, China's foreign trade and import and export of the international and domestic economic development of the role of the promotion of the growing. 1988, China's foreign trade and import and export total amount of the first time exceeded the 100 billion U.S. dollars mark, reached 102.79 billion U.S. dollars; then after six years of development. In 1988, China's foreign trade import and export exceeded the 100 billion U.S. dollar mark for the first time, reaching 102.79 billion U.S. dollars.

After China's accession to the WTO in 2001, foreign trade has been revitalized, with an annual growth rate of more than 20%, which is the most rapid development since the reform and opening up, and has made remarkable achievements: in 2004, the scale of import and export of foreign trade exceeded 1 trillion U.S. dollars, and it has become the world's third-largest trading country; in 2006, the import and export of foreign trade amounted to 1.76 trillion U.S. dollars, and it has become the world's third-largest trading country. 1.76 trillion U.S. dollars, the world's third largest trading country, and further narrow the gap with the second largest trading country; accession to the WTO during the five-year period of the total value of imports and exports has exceeded the reform and opening up to join the WTO before the 23 years of the sum; 2006 foreign exchange reserves exceeded 1 trillion U.S. dollars, reaching 1,066.3 billion U.S. dollars.

The good development of foreign trade, for the solution of China's economy in the process of development of contradictions, improve the international competitiveness of China's products and comprehensive national strength, and even the promotion of the world economy, have shown a very important role:

One of the improvement of the structure of China's economy, accelerate the process of industrialization. With the development of China's foreign trade, the export-oriented economic sector continues to grow, through the expansion of exports, the use of funds obtained, the introduction of capital goods, raw materials, technology and so on, necessary for industrial production, accelerate the process of industrialization, change the traditional pattern of industries, and promote the optimization of the industrial structure, to enhance China's overall competitiveness in the international arena.

The second is to promote domestic technological progress, reflecting the "latecomer advantage". Foreign trade is an important channel for China to acquire technology, and the transnational transaction of intellectual property rights itself constitutes an important content of modern international trade. In recent years, through the introduction of advanced technology and production lines, China has realized the continuous optimization of the export structure of products, and promoted domestic technological progress, which is of great significance to the promotion of economic development.

Thirdly, it is to make full use of "two kinds of resources and two kinds of markets" to enhance the economy's ability to resist risks. Through the export of domestic production of relatively surplus products, to occupy a place in the international market, can ease the contradiction between domestic supply and demand, improve economic efficiency. At present, China's cell phones, refrigerators, televisions, motorcycles, clothing, shoes and hats export dependence are more than 50%, and some even reached more than 70%. And the domestic economic development needs of the shortage of raw materials, but also through foreign trade can be realized, in 2005 China has become the world's iron ore, alumina imports of the first country and the third largest importer of crude oil. Due to the benign operation of import and export, it not only makes up for the phased structural imbalance of China's domestic economic development, but also raises the level of total output, and gradually realizes the rationalization and advancement of the industrial structure, and strengthens the risk-resisting ability of the economy.

Fourth, it promotes capital accumulation and enhances scale efficiency. Over the years, China's goods trade surplus has been an important source of foreign exchange reserves rose rapidly. 2001 the end of China's foreign exchange reserves just over 200 billion U.S. dollars, the end of 2006 exceeded 1 trillion U.S. dollars, the same period of trade surplus in goods amounted to a cumulative total of 367.5 billion U.S. dollars, equivalent to the same period of the foreign exchange reserves of 43% of the increment. The trade surplus provides a source of funds for the capital accumulation of enterprises, raises the expectations of producers for the future market, stimulates the demand for investment, and enhances the economies of scale of enterprises.

Fifth, it has strongly promoted economic growth and boosted domestic employment. The increasingly active export-oriented economy has led to an increase in the level of domestic employment. According to the analysis of relevant experts, in 2006, China's foreign trade dependence reached about 70%, effectively driving the domestic employment, the new urban employment population of 11.84 million people, the largest number of new jobs in recent years.

Sixth, playing a positive role in global economic growth. Compared with many countries, China's development is more open, the driving effect on the world economic growth is greater, over the years, whether imports or exports can maintain high growth. According to the analysis of relevant experts, between 2003 and 2005, China's foreign trade growth to the world trade growth contribution rate has been maintained at a level of about 10% of the overall recovery of the global economy has played an important role in promoting.

The trade surplus is the inevitable result of China's policy of actively utilizing foreign investment and its unique trade structure, and it is also a normal manifestation of the long-term healthy and rapid development of the domestic economy

For a long time, China has possessed a good political and economic environment, and the overall growth of the world economy in recent years has created a good external environment and internal conditions for China to actively utilize foreign investment, and it has formed an environment in which processing trade is the main mode of trade and foreign trade is the main mode of trade, and processing trade is the main mode of trade and foreign trade is the main mode of trade. As the main mode of trade, foreign-invested enterprises as the main body of import and export of China's unique trade structure. This is the main factor of China's foreign trade surplus for a long time.

One is the rapid development of processing trade. On the one hand, China's good industrial supporting capacity and a large number of cheap labor, accelerating the transfer of global manufacturing to China. On the other hand, due to the processing trade bonded policy, for foreign investment in processing trade has a greater attraction. Therefore, for a long time, processing trade has become "half of China's foreign trade". Processing trade is a form of value-added trade, will inevitably produce a trade surplus. 2006 China's trade surplus totaled 177.5 billion U.S. dollars, of which, import and export for the deficit trade mode: foreign-invested enterprises equipment imports deficit of 27.8 billion U.S. dollars, bonded areas, bonded warehouses, import and export deficit of 60 billion U.S. dollars, as well as other trade modes have a portion of the deficit; import and export trade for the surplus trade mode are mainly: General trade import and export surplus of 83.1 billion U.S. dollars, while the processing trade import and export surplus is as high as 188.9 billion U.S. dollars, more than the total trade surplus. This shows that the current processing trade is the most important factor in China's foreign trade surplus.

The second is that China's utilization of foreign direct investment continues to grow. 2006 China's utilization of foreign direct investment amounted to 63 billion U.S. dollars, has been maintained for three consecutive years at a level of 60 billion U.S. dollars or more, of which nearly 70% of the input into the manufacturing industry. At present, more than 190 countries and regions have invested in China, and more than 480 of the world's top 500 companies have invested in China, and China has become the center of global manufacturing of some important industrial products. The position of foreign-invested enterprises in China's foreign trade has been increasingly consolidated. On the one hand, foreign-invested enterprises produce for the domestic market, replacing some of the demand for imports. The import and export dynamics of steel, automobiles and parts, machinery and equipment, consumer electronic products, urea and other products have changed significantly. On the other hand, due to the limited domestic market, there is a huge demand for exports by foreign-invested enterprises themselves. In recent years, foreign-invested enterprises exports accounted for the proportion of China's total foreign trade exports has been maintained at about 60%, and is increasing year by year.

In addition to the above two long-term factors, China's trade surplus problem with the following three short-term factors have a greater relationship:

One is part of the enterprises in the export tax rebate rate adjustment before the sudden export. In the past two years, the country's "two high and one capital" (high energy consumption, high pollution and resource) products successively lower or cancel the export tax rebate rate. Enterprises often according to the policy adjustment date in advance of the export or surprise exports. For example, in 2006, steel, clothing and other products focused on the phenomenon of surprise exports is more obvious.

The second is the pressure of the appreciation of the RMB prompted enterprises to accelerate the pace of exports. As of January this year, the yuan against the U.S. dollar exchange rate compared to the exchange rate reform before the cumulative appreciation has reached 6%. In the long run, the appreciation of the RMB will bring benefits to industries with a high proportion of imports, a large scale of foreign debt, high liquidity or huge RMB assets, while it will have an impact on export-oriented industries with high foreign-currency assets or international pricing of products, such as the electronics, textile, machinery and other industries. In order to minimize or avoid the impact of the continued appreciation of the RMB, many companies have accelerated the pace of exports, while taking a wait-and-see attitude towards import purchases.

Third, the rising cost of exports has increased the price of export commodities. As domestic land, raw materials, labor and other prices have risen in recent years, resulting in rising export costs, many enterprises to pass on part of the cost by raising export prices. Compared with 2005, in 2006, China's export prices rose by 4.2% overall, while import prices rose by only 3% overall. It should be pointed out that: with the continuous improvement of the management level of the state to combat export tax fraud and the continuous strengthening of the awareness of law-abiding and self-discipline of the enterprises, the enterprises' export tax fraud and illegal behaviors have been gradually reduced; the direct factor leading to the increase in the overall level of the export price is the small appreciation of the RMB and the overall increase in the cost of exports. Therefore, from the customs statistics point of view analysis, the so-called "a large number of exports overstated prices to cheat export tax rebates, resulting in a huge false trade surplus," the argument is unfounded.

In addition, a small number of developed countries or regions of China's high-precision technology and its products export embargo, resulting in China's economic development and industrial upgrading of urgently needed technology and its lack of imports of equipment, which is also an important factor in causing a large trade surplus.

Three, we must correctly treat and properly deal with the new problems brought about by the substantial increase in trade surplus

China's policy of actively utilizing foreign capital and the unique trade structure, determines the phenomenon of China's trade surplus will exist for a long time. Internationally to determine whether the balance of trade, usually with a trade surplus (deficit) compared with the total amount of imports and exports for the year, within 10% of the basic normal, the 10% can also be called trade imbalance "warning line". 2006 China's trade surplus of 177.5 billion U.S. dollars, accounting for about 10.1% of the total amount of imports and exports for the year, just touched the "warning line". "Alert line". From the current situation of Germany, the world's largest exporter, Germany from 1952 to 2005, the 54 years, foreign trade are surplus, trade surplus in 2002 for the first time more than 100 billion U.S. dollars, in 2004 and 2005 were more than 190 billion U.S. dollars. Among them, there were 12 years in which the trade imbalance exceeded 10%, with a maximum of 12.7%, which exceeds the current trade imbalance of our country. Therefore, China's current large trade surplus is basically normal.

But the large trade surplus also brings us new problems. Such as: trade friction between China and its major trading partners to increase the risk of export enterprises encountered international trade barriers; China's foreign exchange management is facing more liberalization of international pressure; the domestic economy is facing the potential risk of inflation and so on. In this regard, we must attach great importance to adopting both positive and prudent approaches to ensure the healthy development of the economy.

I believe that the solution to this problem, not only to work in the field of foreign trade, but also in other areas of brainstorming, not only to change the mode of growth of exports, but also in the expansion of imports, increase domestic demand to do. First of all, to vigorously develop the domestic consumer market, you can improve the social security system in order to stimulate domestic demand to improve the situation of sluggish domestic consumption. Secondly, we should promote the transformation and upgrading of processing trade by expanding the catalog of restricted commodities for processing trade and making policy adjustments to the processing trade of "two highs and one capital" and other products. Once again, make necessary adjustments to the policy of utilizing foreign capital, and change from "attracting investment" to "selecting business and choosing capital" and "raising business and nurturing capital", etc. Fourthly, improve the RMB exchange rate formation mechanism, and make necessary adjustments to the policy of utilizing foreign capital. Fourth, improve the RMB exchange rate formation mechanism, and reasonably guide the expectation of appreciation. Fifth, in the adjustment of the export structure and expand imports to do some specific work, especially to urge a few developed countries or regions to relax the export restrictions on China's high-precision technology and its products, so that the structure of imports and exports to optimize, to alleviate the pressure of the surplus is rising too fast.

In short, in the face of a large trade surplus generated by the new situation, we have to maintain a normal heart, not only to attach great importance to the trade surplus problem brought about by the external imbalance and internal impact, but also to correctly recognize the objective inevitability of the trade surplus. As long as we calmly and objectively analyze the problem, actively and steadily deal with the problem, China's foreign trade can always maintain a good momentum of development.