Addtime :2015-06-18
What is the source of the slowdown in China's foreign trade?
Coincided with the emerging market economies, financial market widespread occurrence of severe shocks, the just released Chinas June trade data and to the economic outlook cast on the trace of the shadow: in June, Chinas import and export value of 2 trillion yuan ($3215.1_yi billion), down 2%. The export of 1.09 trillion yuan RMB ($1743.2_yi billion), decreased 3.1%; imported 0.91 trillion yuan renminbi ($1471.9_yi billion), down 0.7%; trade surplus 1693.4_yi billion yuan RMB ($271.3 billion), narrowed to 14%.
From the June foreign trade data released by the General Administration of foreign trade, the main reason for the decline in exports is the external macroeconomic environment problems, especially in emerging market economies, a large margin of turbulence. In imports, the main reason is that the domestic economic slowdown; the two is the export slowdown, so the need for the export of raw materials, energy, intermediate products, etc..
External environment pressure
We see, during the first half of this year, China and the sovereign debt crisis prolonged EU trade fell 3.1%; American economic recovery is relatively much more stable, bilateral trade value grew 5.6%. The biggest risk is emerging market economies. Release of the first two months of the foreign trade data I have proposed, larger pressure reversal of the beginning of good foreign trade, mainly because of the social and economic risks in emerging market economies accumulated has reached a level that can not be ignored. After the second half of this year and the next two years, emerging market economies have economic and social risk of concussion higher, it is possible to repeat the developing countries and the Soviet Union and the East European group from the 1970s boom into the mistakes of the 1980s debt crisis.
As emerging markets in Chinas exports accounted for more than half, and the growth is very fast, this potential risk pressure can not be underestimated. One of the potential risk factors for tipping this kind of turning point is that the primary product market is down, and the other is the United States and other developed countries, such as monetary policy transition. Due to the trend of economic recovery in the solid, exit policy of quantitative easing is likely to appear in this year, at the appointed time triggered capital flow reversals may changes to Chinas imported inflation pressure in a certain extent, the more on other macroeconomic stability was significantly lower than that in Chinas emerging market economies have a greater impact. From the 1980s in developing countries and in Eastern Europe and the Soviet Union Group comprehensive debt crisis, Mexico financial crisis in 1994, we have once again witnessed the developed countries, especially monetary tightening in the United States how developing countries towards the depths of the monetary and financial crisis, and objectively determine the conditions for such a crisis may not be repeated. In the last two months, its basically the case.
Trade disputes are also a cause of no small. In the first quarter of this year has 12 countries to our country launched 22 trade remedy investigations, also a quarter involved in trade remedy investigation there are Thailand, India, Brazil, Argentina, Mexico, Malaysia and other developing countries; in the second quarter, the EUs PV double reverse, ready to Chinese radio communication equipment and components start double anti investigation and with its huge involved trade shocked the international market. In such a bad external environment, Chinas total trade growth rate decreased or even decreased, some industry trade volume decreased, it is difficult to avoid.
At the same time, the decline in foreign trade volume is also related to the global inflation pressure, the decline in foreign trade commodity prices, this point in the import reduction performance was particularly prominent. Inspected from the global background, in addition to the Middle East and North Africa and Afghanistan, Pakistan for deep "Arab Spring" political unrest and war quagmire inflation rate increased from outside, the world other major regional inflation pressure reducing has become a common trend, mainly for the consumer price index (CPI) 2012 annual increase is lower than the annual increase in 2011, or at the end of 2012 below or in the year 2012, 2013 first quarter rose less than or at the end of 2012. Re examination of the global trade in goods in dollar denominated commodity price changes, from 1995 to 2004, manufactured goods, petroleum, non fuel primary products prices rose an average respectively 0.2%, 9.0% and 0.1%, 2012 - 0.5%, 1.0% and - 9.8% respectively, the International Monetary Fund expected 2013 which rose 1.0%, - 2.3% and 0.9% respectively. Now it is likely to have been negative.
Under such a background, in the first half of this year Chinas crude oil, coal, iron ore and other bulk raw materials import price fell in varying degrees, in the average price of imported crude oil fell 7.6%; soybean import prices rose 9.2 percent; imports of copper price fell 3.4%; average price of iron ore imports fell 4.6%; average price of coal imports fell by 16.3%.
Challenges still exist
The trade data in the first half of the year show that Chinas foreign trade is facing great challenges, but the question we should look from two respects, because our central goal is to maintain and improve its position in the international economic system. Therefore, in a period of economic prosperity, our goal is to pursue the absolute high growth; during the depression, the goal is to pursuit of relatively high growth, even if the growth rate of absolute value is not high, or even decreased, as long as the growth rate is higher than other countries, or is a decline of less than other countries, our relatively position is still on the rise.
The distortion of the flow of hot money is a complicated problem, but I dont think hot money flow can have a lasting impact on the foreign trade data. Because so far in China through misinvoicing of ways to carry out cross-border capital flows (i.e. hot money inflow and outflow) is mainly textile enterprises through to Hong Kongs arbitrage trade open||||