From 2020 to 2021, China's foreign trade exports have achieved remarkable results, with factory electricity consumption surging by more than 50% and orders overwhelming, making China a stabilizer in the global fight against the pandemic. However, China's foreign trade data in 2023 looks a little bleak.
According to customs statistics, from January to August 2023, China's total import and export value decreased slightly by 01%, well below the growth level of about 20% in previous years. Among them, exports fell by 8 year-on-year in August8%, imports fell 7 year-on-year3%, showing a year-on-year decline in China's foreign trade.
As one of the three troikas of China's economy, foreign trade exports not only affect domestic GDP growth, but also affect our employment and income.
Exports fell year-on-year in August.
So, why are China's foreign trade exports slowing down?And how do we deal with it?
China's foreign trade is under pressure, but there are opportunities In the past year, China's foreign trade data has been showing a weakening trend, if we draw the monthly data of the latest year as a line (light blue line), we can see that China's year-on-year exports have been gradually weakening, and in the past year are below the 0 axis, in a state of negative growth.
China's year-on-year export data for the month (light blue line).
There are two reasons for this, one is the contraction of international demand caused by the Fed's interest rate hike, and the other is the market diversion caused by the decoupling of China and the United States.
Since the beginning of last year, the Federal Reserve has taken rapid and large interest rate hikes in order to curb domestic inflation risks, triggering a global follow-up rate hike. As a result, the global economy has fallen into a general recession, with consumers losing their purchasing power and spending habits becoming more frugal.
As the world's factory, China mainly exports goods to European and American countries, and their demand has decreased, which means that China's orders have also decreased. So we see that although China's exports are still very high, the year-on-year growth rate has slowed down significantly.
Another reason is the decoupling between China and the United States.
Since the outbreak of the war in 2018, the United States has been trying to reduce its dependence on Chinese products and promote the revival of domestic manufacturing, introducing a series of preferential policies to encourage American companies to return to domestic production and revitalize the manufacturing strength of the United States.
However, the manufacturing industry itself is a very low-profit industry, and the high labor costs, relatively low production efficiency, and lack of hard work attitude in the United States make it difficult for the American manufacturing industry to produce some goods that are already produced in China. The U.S. can only focus on some ultra-high-end manufacturing industries that are highly profitable and rely on high-tech equipment, which is in line with its advantages.
Due to the requirements of the United States, TSMC went to the United States to build a factory.
So we see that under the pressure of the United States, TSMC in Taiwan, China, has to build factories in the United States, and even move machines and employees from Taiwan to the United States. This is actually the United States using political tactics to reshape high-end manufacturing in the United States.
This series of moves has also brought difficulties to China's exports. Many countries are threatened by the United States and do not dare to do business with China, the most typical example is Huawei, which was sanctioned by the United States and the European Union.
The UK dismantles Huawei's 5G equipment.
Moreover, in the process of implementing the decoupling policy, the United States consciously wants to "reshape the global industrial chain", so we see more and more industries that were originally in China being diverted to Vietnam, Cambodia, Thailand, India and Mexico. These countries are preempting our low-end industrial chain. Although these industries may seem to have little value and profit, they can provide us with many employment opportunities.
Therefore, China's share of the world's manufactured goods is gradually decreasing, and we need to be vigilant about this, and we cannot think that the low-end manufacturing industry in the United States is vulnerable. We need to be vigilant.
After all, the Americans not only firmly control the chip manufacturing industry (I didn't expect Huawei to break through), but they are also trying to divide China's low-end industrial chain.
What should we do in the global economic downturn?The global economy has been in the doldrums since last year. While the U.S. interest rate hikes have dragged down the global economy, it has used its dollar hegemony to fuel its own economy, so that it has maintained a relatively stable performance in a tight environment. But the gloomy picture is for European countries, where inflationary pressures persist and economic growth is less than 1%.
Predictably, the global economy has not yet come out of the shadows, and if the Fed continues to adhere to a tight monetary policy, then the United States may not always be unharmed. Then the global economy will decline further, especially if the Fed has one more rate hike this year.
The Federal Reserve raised interest rates, leading to a decrease in global demand.
What should we do in times of crisis like this?The first thing is to use our strengths to deal with the crisis.
First of all, we must make good use of China's huge development resilience and development potential, as well as China's stable fundamentals, and boost our development confidence through various policies, so that everyone knows that although China's economy has encountered difficulties, the economic growth rate in the second quarter was as high as 6.%.3% far exceeds that of European and American countries.
Secondly, China's industrial chain is relatively complete, and it is not afraid of general blockades and sanctions, as long as we are given time, it is not impossible to break through the technological blockade. For example, this time Huawei's Kirin 9000S chip has reached the level of 7nm, and the yield rate of the chip has exceeded 50%, which is higher than our previous highest expectations, and even shocked European and American countries. This is a high-end breakthrough.
In the low-end field, we should not panic, we can choose to take the initiative to compete with other developing countries. For example, if the United States needs to import some goods from Mexico, then Chinese companies can go to Mexico to build factories and sell them to the United States, and many Chinese entrepreneurs have already begun to do so.
Another example is that Chinese businessmen have built factories in Vietnam and Thailand, and sold domestic goods to European and American countries again by changing hands, which can bypass the US sanctions and blockade of China. To achieve our ultimate goal.
For example, China's new energy vehicles have mastered the right to speak in the market, and China's automobile exports in the first eight months were as high as 442.7 billion yuan, an increase of 104 percent year-on-year4%, which can give us more ** surplus. Enhance China's foreign trade and international competitiveness.
China's automobile exports surpassed Japan's, becoming the world's No. 1!
All of the above shows that although it is not easy for us to maintain growth in the context of the global economy, the stability of China's fundamentals, as well as the breakthrough of some industries, China's increased efforts to develop Southeast Asia, the Middle East and South American markets will also contribute to the recovery of our foreign trade.
As long as the Fed starts cutting interest rates, China's economy will continue to improve!
Finally, I would like to say that according to economic theory, as long as the Federal Reserve starts to cut interest rates, then the overall environment of the global economy will improve, demand will recover, China's orders will be more, and China's economy will gradually improveCome on, China!