January foreign trade "double drop" without excessive worry

In January 2012, the total value of China’s foreign trade import and export was US$272.6 billion, a year-on-year decrease of 7.8%; of which exports fell by 0.5% and imports decreased by 15.3%. The re-emergence of the "double drop" of imports and exports after several years has aroused widespread concern at home and abroad. China is the largest country in the world with the highest degree of trade dependence. This "double drop" situation has also added "the basis" for the "China's economic hard landing theory."

Needless to say, the current external environment of China's foreign trade is quite severe. However, has China's complete industrial system, which has been established for more than 60 years, really frustrated the international competition? Is China's factory status in the world so fragile that it can't withstand a bit of wind? the answer is negative.

First, the "double drop" of imports and exports in January this year was largely a product of the "Spring Festival Effect." The annual Spring Festival will greatly reduce the working days and output and exports of the current month. As China's national income level increases, employment conditions improve, willingness to sacrifice the pace of early work to fall on the Spring Festival holiday is reduced, and people are willing to rest until the fifteenth day of the first month to work.* * Large increase, this "Spring Festival effect" there is an increasing trend. In January of this year's Spring Festival holiday, there are only 17 working days in the current month, which is 4 working days less than the same period of last year. In this way, according to international practice and in combination with China's actual situation, after eliminating the influence of the Spring Festival effect by the seasonal adjustment method, China’s import and export in January The year-on-year growth rates of exports, exports, and imports were 6.2%, 10.3%, and 1.5%, respectively.

By further analyzing the status of China's major export commodity categories during the month, we can see that our export competitiveness is still quite strong, and even the traditionally labor-intensive products that have been hardest hit in the high-cost era are no exception. In January of this year, China’s traditional bulk labor-intensive commodity exports remained relatively stable. Among them, 7 kinds of traditional labor-intensive goods such as clothing, textiles, and footwear accounted for 22.4% of China’s total exports during the same period. It can thus be seen that rising costs are not enough to fundamentally shake the export competitiveness of China's traditional labor-intensive industries.

Even within a relatively long time span, the export competitiveness of China’s traditional labor-intensive industries will remain for some time. First, because China is gradually surpassing the phase of relying solely on price competitiveness, it is increasingly relying on the advantages of human resources, public service efficiency, infrastructure, and supporting industries. Second, China can rely on the transfer of domestic industries to digest it. A considerable part of the pressure of rising costs.

China is a large country with unbalanced regional development. The manpower and land costs in the central and western regions are much lower than those in the eastern developed regions. China's domestic industrial transfer has also achieved considerable results. In the past five years, the export growth of the central and western provinces, autonomous regions and municipalities has been higher than the national average.

According to statistics from domestic destinations and sources of goods, the increase in Chongqing’s foreign trade volume has been higher than the national average since 2006. In 2011, the country's foreign trade increased by 22.5%, while Chongqing's growth rate was as high as 135.1%, of which export growth was as high as 164.9%.

In January of this year, exports from the central and western regions continued to grow rapidly. Among them, the export growth rates of Chongqing, Henan, Guizhou, and Jiangxi provinces were 1.1 times, 1.1 times, 19.6%, and 23.5%, respectively. As for the incomparable geographical disadvantages of China's inward-moving export industries and the coastal areas of developing countries such as India and Vietnam, relying on the advantages of transport infrastructure and relying on the improvement in efficiency brought about by the customs clearance procedures, can offset a considerable part of this. It is believed that the central region of China can seize this opportunity for industrial transfer.

Even more gratifying is that, even in the double-down situation in January, the progress of China's export upgrade continues to continue. In terms of export commodity structure, China’s electrical and electronic products exports in January were US$33.21 billion, a decrease of 3.5%, and machinery and equipment exports were US$27.15 billion, an increase of 3.5%. As for the composition of trade methods, China’s general trade exports in January totaled 76.77 billion U.S. dollars, up 2.6%; imports were 74.76 billion U.S. dollars, down 12.5%; the processing trade exports during the same period were 62.64 billion U.S. dollars, down 4%; imports were 30.12 billion U.S. dollars, down 19.9%. The growth of general trade in exports and the decline in processing trade indicate that China’s trade pattern is increasingly turning to more efficient general trade methods.

If so, why are we too worried?