in the case of weak external demand, how will China's foreign trade develop? How effective can enterprises "go out to sea in groups" in the near future? How does China expand and attract foreign investment? China News Weekly interviewed Wei Jianguo, vice chairman of China International Economic Exchange Center and former vice minister of the Ministry of Commerce.
Foreign trade is the reserve for economic development
China Newsweek: Export is a major pillar to support China's economy, but "insufficient external demand" has recently become a frequently discussed keyword. In April, 222, the total value of foreign trade import and export increased by .1% year-on-year, and then rebounded. By November, the growth rate dropped to .1%. What risks are foreign trade facing?
Wei Jianguo: In November 222, the growth rate of the total value of foreign trade imports and exports dropped to .1%, but this does not mean that foreign trade weakened.
first, when we look at a country's foreign trade situation, we never calculate it in a single month. This year, there are many unstable factors in the world, not to mention great changes in a single month and a single week. Second, its decline is due to the Russian-Ukrainian conflict and the United States raising interest rates four times in a row. This is a temporary phenomenon and is common in foreign countries, so don't be afraid of a slowdown in growth. I believe it will be made up in December soon. According to the law of foreign trade, there will be a small tail in November and December every year, because besides Christmas, there will be a New Year holiday and the overall supply of the next year, but this year's tail is slightly raised.
the risks faced by foreign trade are mainly related to four aspects. First, from the perspective of Europe, it will move some European factories, especially cutting-edge factories, to the United States because of the American Inflation Reduction Act. At present, it seems that the EU has no power to fight back. They have neither discussed this issue nor answered it. Therefore, the EU economy will enter a recession in an all-round way next year, which is what everyone is worried about. Second, after the conflict between Russia and Ukraine, many energy prices rose, which led to the suspension, bankruptcy and transfer of a large number of small and medium-sized enterprises. Third, after the continuous inflation in the United States, the income of ordinary people will decrease, and the demand will also decrease. The fourth is trade protectionism, which will be a great test for China's foreign trade enterprises if foreign demand decreases and trade protectionism is ushered in at the same time.
but can it be said that the weakening of external demand will affect the weakening of demand for goods from China? You can't draw an equal sign. The weakening of global demand is a general trend, but I think the demand and recognition of China's goods is entirely artificial. Recently, some enterprises have organized groups to grab orders, and all of them have achieved very good results, which is not easy.
On February 15th, 222, a large container ship was loading and unloading goods at Yantian Port in Shenzhen, Guangdong. Photo/reporter Chen Wen
China Newsweek: The Central Economic Work Conference held in December 222 laid out five major priorities for next year, with the primary focus on expanding domestic demand. Facing the challenge of insufficient external demand, how do you see the performance of foreign trade next year?
Wei Jianguo: The central government has proposed to focus on expanding domestic demand in 223, so as to boost our overall economy. In my opinion, if it is described as a war, there is a reserve in the war, and wherever there are difficulties, it will appear there. Foreign trade is a unified formation as a reserve anytime and anywhere. Therefore, the task of foreign trade is still very heavy this year. We should plan ahead when the foreign trade situation is good, so that we can take the initiative to start the transformation. Under the main cycle of stimulating domestic demand by consumption, foreign trade can help and support the economy and play an auxiliary role, so foreign trade cannot be underestimated.
China's foreign trade enterprises are not the ones they were 2 years ago or even 1 years ago. We joined the WTO 2 years ago, and now we have developed from the middle and lower end of the global supply chain and industrial chain to the middle and upper end, with strong resilience. Foreign trade has enough confidence and comes from our strong industrial chain and supply chain. Therefore, I believe that foreign trade in 223 may still make a greater contribution to the economy than last year.
China Newsweek: Among the five major tasks assigned by the Central Economic Work Conference, the fourth one is to expand and attract foreign investment. In the past two years, some industrial chains and foreign capital have shown signs of withdrawing from China. In the first 11 months, the growth rate of import and export of foreign enterprises was only .1%, while the proportion dropped to 33.1%. What measures should be taken to expand and attract foreign capital?
Wei Jianguo: The Central Economic Work Conference has clearly requested that greater efforts should be made to attract and utilize foreign capital and to stabilize foreign trade. Therefore, these four words of greater strength are the important direction of foreign trade in 223.
this year, we will continue to promote high-level opening up. first, we will expand market access, and the negative list will continue to be "slimmed down". Second, increase the opening up of modern service industry. According to the classification of WTO service industry, there are 98 types, which involve financial industry, shipping, logistics, and even cultural and sports health and healthy old-age care. At present, we haven't opened the modern service industry, and opening it will mean letting more foreign capital in.
In addition, we should actively join CPTPP like RCEP, and the Central Economic Work Conference also pointed out that we should actively compare relevant rules, regulations, management and standards, that is to say, we should introduce some rules and regulations that are conducive to attracting foreign investment, and create a market system that is market-oriented, legal and international, which is ready for the next overall opening up.
In p>223, more opening-up policies will be intensively introduced, mainly to attract and utilize foreign capital. I suggest that all provinces and cities take action. Any province and city that can work hard on the business environment and benefit foreign investment in terms of system, management, standards and regulations can seize the opportunity. In addition, the central and western regions have certain potential, but this potential has not yet been brought into play. The labor cost in the central and western regions is relatively low. In addition, Zhengzhou, Chengdu, Sichuan and Wuhan along the "Belt and Road" have the opportunity to gradually become logistics distribution centers, which will not only reduce the overall logistics cost, but also attract more foreign investment. The central and western regions should be mentally prepared, embrace the transfer and undertake the transfer, so that more global capital, information, technology and talents can take root and blossom locally.
It's necessary to make it a normal practice to grab orders at sea
China Newsweek: One of the reasons that foreign trade will be affected in 222 is that a large number of domestic import and export exhibitions will be cancelled. According to the statistics of Exhibition Plus Network, the exhibition information platform, only 292 exhibitions will be held in 222. If the import and export exhibition is expected to return to the pre-epidemic level in 223, is it possible to make the foreign trade industry usher in a real rebound?
Wei Jianguo: Large-scale international exhibitions are very important. Although there were thousands of exhibitions in China before the epidemic, they were generally recognized internationally and did not meet the needs of international customers. You can't sell goods just by putting them there. In the 197s, when we took our delegations to participate in exhibitions abroad, we all placed orders according to market demand and customers' needs. China is a supplier. We need to participate in and hold large-scale exhibitions recognized by international customers, understand consumers' preferences, and force production by the market, so that the order volume will be high.
before the epidemic, there were 14 internationally recognized large-scale professional exhibitions and 8 comprehensive exhibitions nationwide, which added up to 22. China is a country that pays little attention to exhibitions. Internationally, from now until April 223, there will be 1,522 large-scale comprehensive exhibitions and professional exhibitions around the world, including electronic exhibitions, furniture exhibitions, consumer goods exhibitions and even dental instruments exhibitions. The economic benefits of large-scale international exhibitions are amazing. For a dental medical equipment exhibition, there are orders of nearly 6 billion US dollars worldwide, and the total national export in November is 3 trillion US dollars. There are also exhibitions of artificial joints, and now there is almost $5 billion in business around the world.
as far as I know, more than 7 of the 1,522 international large-scale exhibitions may not be held, for one thing, because of the funding problem, and for another, because of the venue. I think China should strive to host more international exhibitions and undertake large-scale global exhibitions, instead of holding another set of exhibitions, which will cost a lot of money, and it will be difficult to achieve good benefits if it is not well organized. We should not only send teams to participate in foreign exhibitions, but also move these international exhibitions that cannot be held abroad to China and to our doorstep, so that we can get orders at our doorstep, thus driving the industrial chain and supply chain and benefiting more small and medium-sized enterprises.
China Newsweek: Recently, various localities organized enterprises to go out to sea to grab orders. What was the actual effect? In the short run, Christmas orders are basically delivered. In the long run, with the slowdown of global economic growth and the downward economic and trade cycle, overseas orders are also more difficult. At this time, going out to sea to grab orders can change the export trend?
Wei Jianguo: The effect of grabbing orders at sea has exceeded our expectations. It not only reflects China's innovative practices in foreign trade, but more importantly, it enhances the recognition and affirmation of China's goods by global customers. The order we brought back this time is enough to meet the production capacity of some small factories for three years, and the money spent is worth it. More importantly, we will take it as a normal practice to grab orders at sea in the future. This is not easy to make China's products familiar to more international customers and meet the requirements of more consumers under the weak global economy, so as to get more orders.
going out to sea to grab orders is a brilliant idea in recent years, especially in coastal areas. It should be said that this has greatly promoted China's foreign trade industry, and will be further strengthened in the future, and it will continue to develop in the central and western regions. At present, the central and western regions are more difficult, mainly because the government subsidies are not in place, and the information is asymmetric. It is necessary to do a lot of detailed preparatory work for going abroad to participate in the exhibition.
I strongly encourage the foreign trade industry to carry forward the spirit of "four dares", that is, Politburo meeting of the Chinese Communist Party emphasized that "cadres dare to act, local authorities dare to venture, enterprises dare to do, and the masses dare to take the initiative". At present, some private entrepreneurs have no energy and enthusiasm. I think they have failed to see the future global demand for China goods and the overall economic development of China after the epidemic. After the Central Economic Work Conference emphasized boosting confidence and adhering to the "two unwavering", now is also a good opportunity for private entrepreneurs to start a second business. Our foreign trade industry has a foundation. Under the present circumstances, private entrepreneurs must stand up bravely, not to be discouraged, not to hesitate and hesitate.
Published in China Newsweek magazine, No.175, January and February, 223
Magazine title: Wei Jianguo: going out to sea to grab orders, to become a normal practice
Reporter: Jiang Zhiyu.