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April 26th, 2023

April 23rd – In a recent press conference held by the State Council Information Office, the Ministry of Commerce announced a series of upcoming measures to address the persistently complex and severe foreign trade situation in China. Wang Shouwen, Deputy Minister and International Trade Negotiation Representative of the Ministry of Commerce, was among the officials who disclosed the new initiatives.

Wang reported that China’s import and export trade grew by 4.8% in the first quarter, which he described as a difficult achievement that stabilized the sector’s opening. However, the external environment remains uncertain, and this uncertainty continues to be the most significant constraint on China’s foreign trade. The International Monetary Fund (IMF) recently lowered its global economic growth forecast from 2.9% to 2.8%, citing a notable slowdown in developed countries’ economies. The foreign trade of neighboring countries has also experienced significant declines.

Chinese foreign trade enterprises face numerous challenges and constraints, such as difficulties attending overseas exhibitions, increasing trade risks, and growing operational pressures.

To support businesses in diversifying markets, the Ministry of Commerce will release country-specific trade guides for each key market. Additionally, the ministry will utilize the “Belt and Road” trade facilitation working group mechanism established with many countries to address difficulties faced by Chinese enterprises in expanding their markets along the Belt and Road Initiative, increasing their opportunities.

Wang highlighted four areas where the ministry will help foreign trade enterprises stabilize orders and expand markets: 1) Organize trade fairs and other exhibitions; 2) Facilitate business personnel exchanges; 3) Continue deepening trade innovation; 4) Support businesses in diversifying markets.

Beginning May 1 this year, China will permit holders of APEC virtual business travel cards to enter the country. Authorities are also studying further optimization of remote detection measures to facilitate business visits to China.

In terms of deepening trade innovation, Wang emphasized the importance of e-commerce, which differs from traditional trade methods by breaking time and space constraints. The Ministry of Commerce plans to promote the construction of cross-border e-commerce pilot zones, conduct brand training, establish rules and standards, and encourage the high-quality development of overseas warehouses.

In addition to releasing country-specific trade guides, the ministry will continue to deepen exchange rate marketization reform and enhance the flexibility of the Renminbi exchange rate. Jin Zhongxia, Director-General of the International Department of the People’s Bank of China, said that the central bank has taken various measures to provide financial support for stable foreign trade development. These measures include reducing financing costs for the real economy, guiding financial institutions to increase support for small, micro, and private foreign trade enterprises, and instructing financial institutions to provide foreign exchange risk management services for foreign trade enterprises.

Data shows that in 2022, the enterprise hedging ratio increased by 2.4 percentage points from the previous year, reaching 24%. The scale of cross-border Renminbi settlement in goods trade increased by 37% year-on-year, with its proportion rising to 19%, up 2.2 percentage points from 2021.

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