As the world’s most populous country and the world’s second largest economy, It is estimated that in the next five years, China will import more than us $10 trillion of goods and services. China’s trade will undoubtedly bring huge opportunities to the world economy.
The report to the 19th National Congress of the Communist Party of China called for forging a new pattern of all-round opening-up, stressing that “China’s door of opening-up will not be closed, but will only open even wider.” At the same time, it also pointed out that “expand foreign trade, cultivate new forms and models of trade, and promote the building of a trade power”. The difference from “trading power” to “trading power” means that China’s trade is playing its own “variation”, which also indicates that China’s trade is about to enter a new era.
The change of kinetic energy
From “Imitation and following” to “Innovation and Creation”
“The Chinese tech industry is already ahead of the US in some ways. Some Western technology companies are looking for ideas from Chinese companies.” “Chinese innovation” in science and technology, the New York Times once lamented.
In recent years, China has accelerated trade optimization and upgrading, encouraged the export of new and high technology, equipment manufacturing and brand products, guided the transformation of processing trade, and promoted the upgrading of China’s export commodities from low-end to high-end. In smartphones, for example, one-third of global shipments last year were made by Chinese brands. In the field of artificial intelligence, brands such as DJI and Mobike are still popular overseas. And the Shenzhou spacecraft, Tianhe Computer, Beidou Navigation and other loud “Chinese name cards”, has become a powerful witness of “Created in China”. The emergence of these innovative achievements has given the international community a “new understanding” of Chinese manufacturing — “imitation and following” is no longer the synonym of Chinese products, and “innovation and creation” is its core competitiveness.
“It used to be made in China, now we have Chinese brands.” Cao Lei, director of China E-commerce Research Center, believes that after decades of development, a number of Chinese enterprises have stepped out of the development mode of OEM and OEM production, focusing on building their own brands. Huawei, Gree, Haier, Xiaomi and other brands have won the favor of more and more overseas consumers.
In parallel with China’s innovative products, China is also actively fostering new forms and models of trade, such as cross-border e-commerce and comprehensive foreign trade services, to create new growth areas.
In recent years, China’s cross-border e-commerce exports have maintained steady growth. In 2013, China’s export e-commerce transaction volume was about 2.7 trillion yuan, and reached 5.5 trillion yuan in 2016, more than doubling in three years. In the first half of 2017, China’s export cross-border e-commerce transactions reached 2.75 trillion yuan, up 31.5 percent year on year, far higher than the 15 percent year-on-year growth in China’s total exports in the first half, data from the Ministry of Commerce showed.
The rapid development of cross-border e-commerce business has spawned a number of cross-border e-commerce platforms with global influence. For example, as one of the largest retailers in the world, Alibaba’s cross-border e-commerce brand buyers have covered 244 countries and regions around the world, and its registered members have reached about 70 million in the past year, making it one of the largest online wholesale trading systems in the world. Aliexpress, its cross-border trade platform for large brands, covers more than 100 million consumers in 220 countries and regions around the world.
Changes the pattern of
From “Chinese Goods” to “Chinese Services”
Serving 23,000 overseas residents and exporting $5.31 million, up 77% year-on-year… This is the record of trade in traditional Chinese medicine services in Hainan province last year. Last year, Hainan was designated by The State Council as one of the 15 pilot areas for innovative development of service trade, proposing innovative tasks in eight of six major areas, including tourism, transportation, cultural services, insurance services, service outsourcing and traditional Chinese medicine services. In the first half of 2017, hainan’s total imports and exports of service trade increased by 23.9 percent year-on-year.
The rapid development of trade in services in Hainan is an epitome of China’s shift from focusing on trade in goods to a coordinated development of trade in goods and services. In recent years, relevant departments have formulated a series of policies and measures to promote the innovative development of trade in services, encourage the export of cultural, tourism, construction, software, r&d and design services, vigorously develop service outsourcing, and build a national brand of “Chinese services”.
Data show that China is moving towards a service-led economy, and trade in services has maintained a good momentum of development, and its status in the national economy has risen significantly. From 2012 to 2016, China’s import and export of services grew at an average annual rate of 9.6 percent, 9.7 percentage points higher than its trade in goods during the same period. China ranks second in the world in trade in services.
Vice minister of commerce ke-ming qian believes that the rapid growth of the service trade become new growth point of the steady development of China’s foreign trade and the transformation and upgrading, depth involved in economic globalization and integration into the global value chain in China plays an important role, help to further promote the reform of supply side structural, make important contribution to sustainable and healthy development of national economy.
It is worth noting that emerging service sectors and high-value-added service exports have become a major highlight of China’s service trade. The latest data shows that from January to September, China’s imports and exports in emerging sectors reached 1049.53 billion yuan, up 10.3 percent year-on-year. Among them, the import and export of intellectual property royalties increased by 38.8 percent year on year, and the import and export of telecommunications, computers and information services increased by 25.2 percent.
Xian Guoyi, director general of the Ministry of Commerce’s department of Services and Trade, said the rapid growth of emerging services exports is the result of many factors, including China’s leading position in big data, cloud computing and mobile Internet technologies, the continuous promotion of the Belt and Road Initiative and the enhanced production and service capacity of China’s manufacturing sector.
The change trend of
From “big in, big out” to “excellent in, excellent out”
The State Council has issued opinions on improving the early warning and rapid response supervision system for the quality and safety of Import and export commodities to effectively protect the rights and interests of consumers. As the overall planning and design of the quality and safety supervision of import and export commodities, the Opinions aim to improve the quality supervision system of import and export products and provide guarantee for the realization of the objectives and tasks of quality and safety supervision of import and export commodities.
Why does the country emphasize the construction of import and export commodity quality on top-level design? This has something to do with improving the quality of China’s trade imports and exports. Over the past few decades, China’s foreign trade has made historic leaps, playing a crucial role in China’s economic development. However, China’s import and export products have many shortcomings in technology, quality and added value due to the excessive pursuit of “large import and large export” in volume.
In recent years, China has adopted a higher-level opening-up strategy, promoted two-way opening-up, and shifted from “large import and large export” to “high-quality import and high-quality export”, thus promoting qualitative improvement of China’s trade rather than quantitative expansion. On the one hand, we implemented a more active import policy to increase imports of advanced technology and equipment, key spare parts and components, and quality consumer goods. We will continue to increase trade in resources and new and high-tech products, and continue to promote domestic entrepreneurship and innovation, and improve the economic structure, transform and upgrade. For example, in the first three quarters of this year, China’s import of high-tech products such as some important equipment and key components grew rapidly, with the import of integrated circuits up 18.4 percent and engine imports up 26.2 percent. On the other hand, we strongly advocate “Made in China” and promote the transformation of Chinese speed to Chinese quality. The “Made in China 2025” initiative will be formally implemented to strengthen the quality foundation. We will incorporate the strategy of making China a country of quality into the outline of China’s 13th Five-Year Plan, promote the spirit of workmanship, and bring China’s economic development into an era of quality.
At the same time, China and other countries focus on complementarity and win-win situation in terms of “optimal import and export”. A series of economic and trade outcomes have been achieved at the recent summit between the heads of state of China and the US. Entrepreneurs of the two countries signed a total of 34 cooperation agreements and intentions, showing the characteristics of “preferential import and preferential export”.
“The economic and trade outcomes reached by the two sides are mutually beneficial and generally balanced. It is a mutually beneficial and win-win business cooperation and will bring tangible benefits to the businesses and people of the two countries.” Yu Jianhua, vice minister of Commerce and deputy representative for international trade negotiations, said sinopec’s participation in the Alaska LNG project, for example, will create about 70,000 local jobs and reduce China’s annual carbon dioxide emissions by 80 million tons.
“Foreign trade is an important force driving a country’s development and has made a huge contribution to China’s economic development. In the future, we will pay more attention to the development of foreign trade, but the mode of development must be adjusted, that is, from quantitative expansion to qualitative improvement. We will continue to enhance China’s status as a major trading country and make further contributions to China’s economic and social development.” Zhong Shan, minister of Commerce, said on building a trading power.