[Economic Daily]WANG Xiaosong: Make “Stable Foreign Trade” A Strong Driving Force to Further Reform and Opening Up

Sino-US economic and trade frictions mean that the external environment of China's foreign trade development has undergone profound changes, but Sino-US economic and trade frictions are only a wave in China's long history of development. Wang Xiaosong, a research fellow at the National Academy of Development and Strategy of Renmin University of China and a professor at the School of Economics, said in an interview with the Economic Daily that properly coping with Sino-US trade frictions is not only a "stable foreign trade" but also a powerful driving force for China's further reform and opening up.

In recent years, China's major import and export trade accounts for a large proportion of the major countries and regions are the United States, Japan, Europe, ASEAN, South Korea, BRICS countries and Hong Kong and Taiwan. Wang Xiaosong said that in the past 10 years, China’s exports to the United States have always accounted for about 20% of total exports. However, since the beginning of 2019, the proportion of China’s exports to the United States has continued to decline. At the same time, the proportion of exports to the EU and ASEAN has gradually increased, and the proportion of exports to the EU has exceeded the proportion of exports to the United States. In terms of imports, the United States has been under 10%, and it is also showing a downward trend, while the BRICS, EU and ASEAN imports are increasing.

Wang Xiaosong conducted an in-depth analysis of the types of China's import and export commodities. In terms of export products, the total exports of mineral chemicals, metal products and electromechanical products accounted for over 70%, and the export of traditional labor-intensive products accounted for about 15%. In the first quarter of 2019, the three categories of commodities such as minerals, chemicals, metal products and electromechanical products in China's merchandise exports accounted for a relatively high proportion. These three types of products are closely related to industrial production, have strong cyclical characteristics, and have a high consistency in year-on-year growth. In terms of imported products, China's imported products are also mainly concentrated in mechanical and electrical products, mineral chemical products and metal products, the overall proportion of the three is close to 90%. In the first quarter of this year, the major exporting countries and regions of mechanical and electrical products were the United States, the European Union and Japan, accounting for more than 40%, of which the United States accounted for 18.60%, the EU accounted for 17.55%, and Japan accounted for 5.93%.

Wang Xiaosong believes that the "selling out" phenomenon has dragged down export data, and non-US exports have played a buffering role in export growth. In dollar terms, export growth was negative in April. China's exports to the United States maintained a relatively high growth rate in 2018, and the export growth rate declined in 2019, reflecting the obvious "selling out" phenomenon in China's trade with the United States. In April this year, China’s cumulative exports to the EU and ASEAN grew at a rate of 14.2% and 13.4%, respectively. This shows that China’s exports to countries and regions outside the United States have played a relatively large supporting role in export growth.

Wang Xiaosong said that in the context of Sino-US economic and trade frictions, China should open up a wider export market, paying attention to both developed markets such as the US and Europe, as well as emerging markets. He suggested that the "Belt and Road" construction should be taken as an opportunity to enhance economic and trade exchanges with countries along the route, while fully exploiting the trade potential of various ownership enterprises, upgrading the technological level of enterprises, and realizing the status in the value chain. "If the value chain of Chinese enterprises is improved, the elasticity of demand is getting smaller and smaller, and the products are irreplaceable, so they are not afraid of any external impact." Wang Xiaosong said, "All circles work together to enhance confidence, the effort to stabilize foreign trade will be with no problem.”