Foreign trade in positive growth in June

China's foreign trade rose 5.1 percent year on year in June with positive growth in both import and export figures, according to data from the state's customs.

For the first half of 2020, overall foreign trade shrank by 3.2 percent year on year to total 14.24 trillion yuan (US$2.03 trillion) due to the COVID-19 pandemic, with exports adding up to 7.71 trillion yuan, a drop of 3 percent from a year earlier, while imports fell by 3.3 percent to 6.53 trillion yuan, the General Administration of Customs said on Tuesday.

Li Kuiwen, director of the General Administration of Customs' Department of Statistics, said that despite the overall foreign trade figure moderating in the six-month period amid COVID-19, China's foreign trade has been rebounding to achieve positive growth for three consecutive months since April.

After experiencing the shock in the first quarter, imports and exports then stabilized in the April-June period. China's foreign trade imports and exports added up to 7.67 trillion yuan in the second quarter, down 0.2 percent year on year, but the decline narrowed compared with the 6.5 percent drop in the first quarter.

As for June, China saw foreign trade rise 5.1 percent compared with the same month last year, with exports growing by 4.3 percent and imports by 6.2 percent.

The Association of Southeast Asian Nations has been China's largest trading partner in the first half year. 

China's foreign trade with ASEAN topped 2.09 trillion yuan, an increase of 5.6 percent, to account for 14.7 percent of China's headline foreign trade figure in the first six months.

Trade with the European Union added up to 1.99 trillion yuan, down 1.8 percent, making EU China’s second-largest trading partner.

China's trade with the United States extended its decline, with the value down 6.6 percent to 1.64 trillion yuan over the period.

Trade with countries along the Belt and Road, meanwhile, dipped 0.9 percent to total 4.2 trillion yuan, but the decline was much slower than that in the headline figure.

Customs highlighted rapid growth in foreign trade by private enterprises. In the first half of the year, they contributed a total of 6.42 trillion yuan to China's exports and imports, up 4.9 percent year on year, accounting for 45.1 percent of the total foreign trade value which was 3.5 percentage points higher than in the same period last year. 

Of this total, private enterprises posted overall exports of 4.14 trillion yuan, up 3.2 percent, accounting for 53.7 percent of the total value of China's exports, while imports increased by 8.1 percent to 2.28 trillion yuan, accounting for 34.9 percent of the headline imports.

During the same period, foreign-invested enterprises contributed imports and exports of 5.55 trillion yuan, accounting for 39 percent. State-owned enterprises' imports and exports topped 2.22 trillion yuan to account for 15.6 percent of the total.

Also, the structure of trade pattern has been continuously optimized, with the proportion of general trade in the country's overall foreign trade growing larger, Li said.

In the first nine months, China's general trade slipped 2.6 percent to 8.55 trillion yuan, accounting for 60.1 percent in total imports and exports which was 0.4 percentage points higher than in the same period last year.

Exports of epidemic prevention materials and mobile phones performed well. 

Since the beginning of the year, a series of policies and measures have come into effect, including improving export tax rebate policies, increasing the supply of foreign trade credit, enhancing export credit insurance support, raising the number of cross-border e-commerce comprehensive pilot zones, and supporting domestic sales of commodities originally produced for export, Li said.

"The practical implementation of these measures have helped foreign trade enterprises tide over difficulties, and effectively promoted exports," Li said. 

In the second quarter, China's exports reached 4.38 trillion yuan, up 4.5 percent year on year, with the export of epidemic prevention materials posting rapid growth.

Exports of textiles, including face masks, surged 32.4 percent in the first half from a year earlier, while exports of medicinal materials and medicines as well as the medical instruments and apparatus jumped 23.6 percent and 46.4 percent, respectively.

At the same time, the impact of epidemic prevention and control led to consumption growth in the "stay-at-home economy.” Related products such as laptop computers and mobile phones posted exports increasing by 9.1 percent and 0.2 percent respectively in the first half.

"China was the first major economy hit hard by the pandemic, but it is also the first to successfully contain the pandemic thanks to its draconian but effective measures,” said Lu Ting, chief economist at Nomura. “When China resumed most of its production in late March, other major economies were deeply mired in the pandemic with broad-based restrictive lockdowns, providing it with substantial space to ramp up exports of medical products, such as masks and ventilators, and work-from-home electronic products including computers, home appliances and mobile phones.

"We see several drivers of China’s impressive resilience in exports, which prompted us to raise our export growth forecast for the second half of 2020 to 0 percent from a negative 9 percent. We also raised our import growth forecast to a 1 percent dip year on year from a 7 percent decline," Lu said. "However, if the pandemic extends to the end of 2020 or even into 2021, it would pose significant negative downside risks to China’s exports."