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Reuters, Beijing, December 28: Under the economic winter that has been hit hard by the global epidemic of the new crown, China’s foreign trade in 2020 can be described as a “dark horse” counterattack on the world trade army, and It has become the responsibility to make up the gap in the global industrial chain. Although it is still unpredictable when the epidemic will dissipate, global demand is still recovering. Looking ahead to 2021, China’s massive foreign trade is expected to stabilize at a high level.
With the gradual introduction of global vaccines, the continued recovery of production capacity, and the continued implementation of the first-phase agreement between China and the United States, analysts are generally optimistic about China’s foreign trade situation in 2021, but also noted that there are still hidden concerns: the degree of global economic recovery is constrained by the advance of the epidemic and the emergence of viruses It is unknown whether the mutation will again cause a negative impact on the supply chain of the industrial chain, and there is uncertainty about the drive for anti-globalization and trade protectionism.
The outlook for the renminbi in 2021 is generally positive, and the risks of increased exchange rate fluctuations still need to be watched. They believe that the strong appreciation of the renminbi may put some pressure on China’s exports, but the restoration of external demand and the resonance of world trade are expected to still benefit exports; and the appreciation of the renminbi, in turn, will increase the willingness of domestic imports, and the continued recovery of the Chinese economy will boost domestic demand. A strong rebound will keep imports rising.
“There is great uncertainty in the epidemic situation. If there is no major change in the epidemic situation, the overall foreign trade situation next year should be cautiously optimistic, and China’s foreign trade can still continue to stabilize.” International Market Research Institute, Institute of International Trade and Economic Cooperation, Ministry of Commerce Deputy Director Bai Ming told Reuters.
Xu Gao, chief economist at Bank of China International Securities, said bluntly: “We should be optimistic about the global economy in the global recycling process in 2021.” He believes that, judging by the current development of the new corona vaccine, we should be able to see a large-scale vaccination in 2021., which means that the interference of the epidemic in economic activities will be greatly reduced.
“After the epidemic, the global economy will not simply revert to the pre-epidemic state, but there will be a period of time when the economy will perform better than before the epidemic.” Xu Gao said that in total terms, the global macro policy after the epidemic will be better than the epidemic. It used to be much more flexible, allowing total global demand to expand faster than before the epidemic.
On the other hand, the epidemic has considerably slowed the expansion of world production capacity and caused a contraction of production capacity in some countries (such as the United States). This means that the global overcapacity problem after the epidemic will be significantly better than before the epidemic.
China’s first repair on the supply side, superimposed on the traditional spike in overseas festival demand, pushed China’s November export growth rate up to 21.1% year-on-year, a high of nearly three years, and the trade surplus expanded to a record high. Analysts said that although the exaggerated export growth rate may not be reproducible, but thanks to the earlier recovery of the Chinese economy from the epidemic, the momentum of foreign trade growth is expected to continue until the first half of next year.
The recent China Central Economic Work Conference noted that next year’s macroeconomic policies must maintain continuity, stability and sustainability, and maintain the necessary support for economic recovery; it is clearly necessary to implement a high-level openness to the outside world and promote mutual promotion of reform and openness. We must improve macroeconomic governance, strengthen international macroeconomic policy coordination, relax market access, and actively consider joining the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
** The direction of the global economic restoration is determined **
Although the global economic restoration in 2021 may have twists and turns, the direction is determined. According to UBS Securities, world GDP in 2021 may change from a fall of almost 4% in 2020 to an increase of more than 6%, and global industrial production may change from a decrease of 5.8% in 2020 to an increase. 6.2%. Therefore, with the release of restricted foreign demand, economic activity and the recovery of the labor market, global demand is expected to recover sharply in 2021.
According to Wang Tao, director of Asia Economic Research at UBS, China’s exports are expected to maintain strong growth next year, but China’s market share will not increase further. The appreciation of the RMB exchange rate may put some downward pressure on exports, especially if the competitor’s currency has not appreciated significantly against the US dollar.
In the view of Wu Ge, chief economist at Changjiang Securities, the world economy is still below its potential level, stimulating fiscal and monetary policies have not yet diminished, and the spontaneous recovery of the endogenous economy overlaps. Global aggregate demand continues to expand moderately, with the PMI and the OECD of several countries leading the way. Indicators, etc., have forward-looking predictions for the repair trend.
“In such circumstances, world trade is also repairing the channels. They support the maintenance of China’s export momentum.” He said that in the first half of next year, China’s exports will show a relatively high growth rate on a low basis. Capacity improvement may go backwards, and the overall export center next year will be higher than this year.
The International Monetary Fund (IMF) stated in a latest report on the major economies of the Group of 20 (G20) that the world economy is recovering from the abyss of the new corona virus crisis, but countries whose infection rates have recovered show signs of slowing down.
** Covering the “stress test” with greater openness **
Obviously, China’s goal for foreign trade development is not only to maintain stability, but also to place long- and medium-term hopes on improving quality, optimizing structure, and enhancing foreign trade competitiveness. After the “test” of the epidemic, further strengthen the future through diversified trade. Ways to deal with the complex and changing external environment, such as exchanges, greater openness, and internal and external cycles.
According to a research report by the Bank of China Research Institute, in the long term, the implementation of the Regional Comprehensive Economic Partnership (RCEP) agreement will reduce trade barriers and transaction costs, helping China stabilize and increase exports to the countries of the region. In terms of imports, the implementation of the high-level opening and the implementation of the RCEP agreement will promote the diversification of imports and expand imports of advanced technologies, equipment and spare parts.
“In the long term, some companies are gradually adopting measures to diversify the industrial chain, and diversification of the industrial chain will also be a slow process in the long term,” said Xing Ziqiang, chief economist at Morgan Stanley China. China is the first to pass the global stress test and its position in the global industrial chain may rise rather than fall.
He also said that China has room for coverage, which is to explore domestic potential through urbanization reform and digital infrastructure, while at the same time increasing openness. The RCEP free trade agreement to deepen regional integration has also strengthened China’s position as the center of the Asian industrial chain.
With the lingering haze of the new corona epidemic and frequent challenges to the multilateral trading system, the RCEP will be resolved in 2020 as scheduled. Industry experts believe that the world’s largest free trade agreement will coordinate the different levels and fragmentation of the different free trade agreements in the Asia-Pacific region. It is also expected to expand the diversified business structure and improve China by forming a broader range of trade and investment cooperation. The ability to deal with business frictions.
Yang Zhengwei, deputy director of the International Department of China’s Ministry of Commerce, has previously revealed that China has started the national approval process for RCEP and will endeavor to complete preparations for the entry into force within six months. The approval is expected to take place in late May or early June 2021.
In addition to the signed RCEP and the CPTPP (Comprehensive and Progressive Trans-Pacific Partnership Agreement) that it is actively considering joining, the China-EU investment agreement negotiations are also intensifying.
China’s Ministry of Commerce recently held the 2020 National Business Video and Telephone Work Conference to clarify that in 2021 it will adhere to the implementation of a broader, broader and deeper openness, and make full use of resources from national and international markets to promote domestic and foreign demand and imports. Coordinate development with exports, foreign investment and foreign investment, and stabilize basic foreign trade and foreign investment. (End up)
