In a rapidly changing global economy, the Central Economic Work Conference in China underscored the urgent need to cultivate new drivers for foreign tradeThis initiative aims not only to consolidate the foundations of international trade and foreign investment in the country but also to explore new avenues such as intermediate goods trade, service trade, digital trade, and cross-border e-commerce exportsAs China responds to both internal and external challenges, this push towards a higher level of openness signifies a pragmatic approach to maintaining and expanding its international market standing.
Understanding the significance of this shift is crucialForeign trade has long been an essential engine for economic growth in China, facilitating the smooth operation of domestic and international cyclesThe goal is to achieve qualitative improvements while maintaining stable growth in trade volumes
Advertisements
Within the context of heightened complexity in the external environment and numerous challenges in domestic recovery, fostering new momentum in foreign trade is seen as a vital response to stabilize China's position in global trade.
In 2023, despite facing high comparative bases, China’s total import and export volume managed to achieve growth, reaching a staggering 41.8 trillion yuanWhen measured against other outward-oriented economies, China performed relatively well, maintaining a stable share in the international marketMoreover, the structure of trade has been continually optimized, with general trade—characterized by longer industrial chains and higher added value—now accounting for 64.8% of total import and export volumeWhile these competitive advantages remain evident, it is critical to recognize the looming threats posed by insufficient global economic recovery, rising unilateralism, and protectionist measures
Advertisements
In response, China must not only protect traditional trade advantages but also accelerate the cultivation of new momentum in foreign trade and establish new superiority in this field.
The push for new drivers reflects a broader context of advancing a new quality of productivity, essential for innovating foreign trade development and constructing a robust trade nationThe imperative for innovation comes from revolutionary advancements in technology, innovative arrangements of production factors, and deep industrial transformations that create new opportunitiesThe digitalization of trade modalities and an upgrading of trade targets are clear manifestations of this new processEmerging business modes, like cross-border e-commerce, have identified significant growth points in foreign trade, while the export of the "new three products" — electric passenger vehicles, lithium-ion batteries, and solar cells — has surged, contributing to the stability and optimization of China’s foreign trade
Advertisements
The service trade sector has also shown promising growth rates.
As global trade sees shifts from traditional commodity trade and intermediate goods trade towards service and digital trade, fostering these new drivers becomes imperative for enhancing China’s competitive position on the world stageThe landscape of global trade is undergoing a transformation spurred by factors such as digitization, intelligence, and sustainabilityWith innovations like smart contracts, electronic documents, smart ports, and digital customs on the rise, the efficiency of international trade is set to reach new heights, potentially altering the existing paradigms of international trade and division of laborThe strategies deployed by major global markets to guide product upgrades and innovate trading practices are paramount for countries, including China, in bolstering their international competitiveness.
To meaningfully advance these new drivers of foreign trade, China must align its innovative strategies with its trade objectives—stabilizing growth, enhancing structural quality, and improving efficiency
- 18% Annual Return
- U.S. Stock Market Appears Overvalued
- Bank of Japan Raises Interest Rates on Friday
- A-Shares Poised for Major Shift
- Rising Pressure on Yen’s Decline
The adoption of technology plays a vital role; innovations in industry and product technologies can significantly increase trade valueThus, enhancing scientific and technological advancements, institutional reforms, and the development of new business paradigms and models is essentialFurthermore, the focus must remain on digital and green transitions, where digital trade and services represent a long-term priority.
When cultivating these new drivers, it is important to assess several relationships: the interaction between new trade momentum and new industrial advantages; the link between new drivers and traditional trade strengths; and the connections between various business modalitiesNew drivers must integrate and support existing advantages, driving forward developments that harness both traditional and modern trading systems.
To facilitate this strategic shift, key tasks and crucial mechanisms need to be identified
Fostering high-quality development of goods trade through leveraging industrial advantages will be pivotalBy capitalizing on the growth of exports in emerging sectors while embedding an innovative and competitive industrial framework, new points of growth can be established across intermediate goods trade such as raw materials, semi-finished products, and componentsEnhancing the digital and green development of goods trade is essential as well, alongside the establishment of a supportive environment that attracts foreign investment while addressing operational challenges faced by foreign businessesA "Invest in China" model will further stimulate engagement.
Additionally, fostering an open and innovative environment for service trade is crucialThis includes easing restrictions on service industry market access and enhancing facilitative advancementsClarifying the processes for foreign personnel involved in commercial activities or tourism can create a friendlier environment for growth
Establishing national service trade innovation demonstration zones can further strengthen China's competitive stance in sectors like tourism and education, ultimately making the service economy more robust.
Finally, revolutionizing the domain of digital trade necessitates a clear focus on direction, supportive platforms, and policies that encourage innovationIntegrating international best practices while addressing concerns around data flow can facilitate smoother operations in digital tradeDeveloping key business sectors within digital platforms, enhancing software and information services, and creating a robust education system for digital skills are foundational to ensuring that China can compete effectively in the rapidly evolving digital landscapeBuilding a comprehensive standard system for digital trade is equally vital for accessing international markets and adhering to global trade norms.