Positive trend likely in H2
The weak economic data suggests that the investment-driven model has lost its luster in China. The task ahead of the country is to maintain stable growth in foreign trade while engaged in necessary restructuring.
During an investigative tour in south China’s Guangxi, Premier Li Keqiang stressed that overall policy must ensure that the economic growth rate and employment do not slip below lower limits, and price rises do not surpass upper limits.
There has been speculation in the media that the government will implement this economic guideline in terms of investment, consumption, and financial and monetary policies. It is expected that there will be major initiatives in railway investment, renovation of sub-standard housing, and urban infrastructure.
These indicate that a slower growth rate is a phase of macroeconomic transformation. China is going to free itself from the addiction to an investment and export-driven growth model, and shift the focus to stimulating domestic consumption.
In terms of international economic cooperation, the spotlight fell on ties with emerging economies during the new Chinese leadership’s foreign tours. Diversification in foreign partnership helps to dilute risk and enables a wider exploration of fields for further growth.
It is noteworthy that progress achieved in free-trade agreements (FTA) has become one of the highlights of foreign trade cooperation. FTA negotiations with Iceland and Switzerland have achieved new breakthroughs, and advances have also been made in bilateral and trilateral FTA talks with South Korea and Japan.
"It's too early to say that there are no prospects of reaching this year’s foreign trade target,” said Shen Danyang, spokesman for China’s Ministry of Commerce.
The ministry will soon roll out support measures to ensure positive growth. The general principle will focus on building a foreign trade environment which is not only import-friendly and conducive to structural adjustment, but also favorable for exporters to realize stable growth, reduce costs, tap into new markets and make full use of comprehensive advantages in technology, brand, quality and service.
"China’s foreign trade performance remains the best among the major economies,” said Shen, and he estimated a slightly higher year-on-year growth.
Edited and translated by Chen Lidan, Wang Xin.
Read the Chinese version: “中国治愈外贸“虚火” 下半年增速“转正”有招”, source: People's Daily Online; Author: Li Haixia
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