Last year brought steady trade growth to China thanks to domestic and global expansion, while behind the numbers, trends are emerging which tell of shifting engines of growth.
China’s foreign trade rose 14.2 percent to 27.8 trillion yuan (4.3 trillion U.S. dollars), following two years of decline.
Exports increased 10.8 percent to reach 15.3 trillion yuan while imports were up 18.7 percent to 12.5 trillion yuan, according to the General Administration of Customs (GAC).
GAC spokesperson Huang Songping attributed the growth to the global economic recovery, steady domestic economic expansion, rising commodity prices, emerging markets along the Belt and Road and a low comparison base.
A closer look at the data reveals a more balanced economy is gradually taking shape.
General trade, which has a higher added-value than processing trade, increased both in volume and proportion in 2017, expanding to 15.7 trillion yuan and accounting for 56.4 percent of total foreign trade, up 1.3 percentage points from 2016.
The Belt and Road has expanded China’s markets, and trade with countries in Latin America and Africa grew by 22 percent and 17.3 percent, respectively, last year.
Private enterprises edged up 0.4 percentage points in their share of total trade. The private sector is the biggest contributor to trade growth.
Trade growth is more balanced among regions. Less developed regions, including central and western China and the rust belt, all outpaced the national average.
Electro-mechanical products remained a pillar of exports, with some high value-added products doing well. Exports of automobiles, computers and medical equipment grew 27.2 percent, 16.6 percent and 10.3 percent, respectively.
The trade surplus continued to narrow last year, shrinking 14.2 percent to 2.9 trillion yuan, compared with a 9.1-percent reduction in 2016 that saw 3.35 trillion yuan in trade surplus.
Imports of some key components and high quality consumer goods rose fast. Integrated circuits and aquatic products were up 17.3 percent and 19.6 percent.
Trade growth momentum is waning as both exports and imports fell in December. Trade will face pressure in Q1 as surveys showed falling confidence and new orders in December. It will be difficult to keep up double-digit trade growth this year given global uncertainties and a high comparison base, Huang said.
Solid global growth may provide some support for export growth, but, real effective exchange rate appreciation and an increase in U.S. protectionism could weigh on exports, narrowing the trade surplus further, according to securities trader Nomura.
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