China's foreign trade passes stress test

Photo shows a view of Nansha Port in Guangzhou, South China's Guangdong province. [Photo provided to chinadaily.com.cn]

This is an editorial from China Daily.

The emergence of a new wave of the novel coronavirus in recent months led to lockdowns of cities in the Pearl River and Yangtze River delta regions, the two major bases of the country's manufacturing and export businesses. The consequent suspension of economic activities prompted widespread concerns about the impact on the country's foreign trade.

But the half-year "score-sheet" the General Administration of Customs released on Wednesday defied any pessimism.

With a combined value of $2.94 trillion, the country's foreign trade rose 9.4 percent over the same period last year, with exports increasing 13.2 percent and imports 4.8 percent. In June, following the lifting of city-wide lockdowns in the previous month, exports grew 17.9 percent in dollar value, outperforming the predictions of most market observers at home and abroad.

For those wanting evidence of the economy's resilience in the less than friendly international environment, this is it. China's foreign trade has emerged from a challenging stress test with flying colors.

The half-year accounting lent credit to two assumptions that have been frequently called into question of late — that the fundamentals of the economy remain sound and that China remains an indispensable link in global supply chains.

Under the country's strict "dynamic clearing" policy for pandemic control, a balance has to be found between virus control and economic activities. The quick rebound of foreign trade speaks volumes of the efforts made to strike this balance quickly and effectively. Although it seemed as if production and business had been hit hard in that process, controlling the virus in the shortest time laid the foundation for resumption of production and business in the long run.

With production resuming in an orderly manner after the epidemic situation was brought under control in May, foreign trade climbed back swiftly, 9.5 percent in May, and 14.3 percent in June. This may have to do with the accumulation of past orders, and many variables may weigh in to affect the second half performance of Chinese foreign trade. But the economy's overall vitality is beyond doubt.

Equally remarkable is the fact that this happened against the backdrop of the efforts by the US administration to engineer the reshaping of supply chains and the "de-coupling" of China from the global economy. The trade figures show the overseas demand for Chinese exports remains robust. According to customs data, exports of electrical equipment and materials, integrated circuits and automobiles grew 24.8 percent, 16.4 percent and 51.1 percent respectively, while those of textile and garments, plastic goods, and shoes increased 10.8 percent, 14.9 percent, and 31.4 percent. Even though some US and other major Western importers sought to divest from China, Chinese exports to the European Union and the US rose 7.5 percent and 11.7 percent respectively.

China's foreign trade may encounter more non-market obstacles overseas. But with Chinese exporters expanding and diversifying their overseas markets, trade watchers are generally optimistic about the prospects for the second half of the year.