The Chinese central government has unveiled a raft of measures to stabilise levels of foreign trade, placing especial emphasis upon exports of clean energy vehicles and the further development of China’s e-commerce sector.
On 25 April, the General Office of the State Council released the “Opinions on Driving Scale Stabilisation and Structural Optimisation of Foreign Trade” (关于推动外贸稳规模优结构的意见).
“Foreign trade is a critical component of the national economy, and promoting a stable scale and optimized structure for foreign trade plays an important supporting role in stabilizing growth and employment, building new development conditions, and promoting high-quality development,” the State Council said.
The Opinions outline 18 measures across five areas for the promotion of growth stabilisation and structural optimisation of foreign trade, including:
- Strengthening trade promotion to expand markets.
- Stabilizing and expanding the scale of imports and exports of key products.
- Increasing financial and fiscal support.
- Accelerating innovation and development of foreign trade.
- Optimizing the development environment for foreign trade.
The Opinions also highlighted the need to accelerate the revision of the catalogue of import-encouraged technology and products, as well as further improvements to the precision of import subsidy policies and guiding enterprises to expand the import of advanced technology that is in scarce supply domestically.
Bai Ming (白明), a researcher from the Ministry of Commerce, said to state-owned media that while China’s imports and exports achieved a strong start in the first quarter, foreign trade still faces considerable challenges with regard to stabilisation and expansion later this year, given the decline of base effects and rising uncertainties on the international market.
Support for automotive sector
In terms of stabilizing and expanding the scale of key imports and exports, the Opinions place especial emphasis on the need to shore up its export advantages in the automotive sector, by encouraging Chinese banks to provide financial support for car companies abroad.
The Opinions call for local governments and business associations to arrange direct communication between automobile companies and shipping companies, guiding them in the execution medium and long-term agreements.
Chinese banks and their overseas institutions are encouraged to “engage in the innovation of financial products and services” to provide financial support for automotive companies overseas, under the precondition of compliance with laws and regulations and controllable risks.
The State Council also wants local governments to provide further support to automotive companies in establishing and improving international marketing service systems, and enhancing their overseas capabilities in the areas of brand promotion, display and sales, and after-sales services.
China’s automotive sector has already seen a leap in both production and exports since the start of 2023. Figures from the China Association of Automobile Manufacturers indicate that in the first quarter vehicle exports reached 994,000, for a year-on-year (YoY) surge of 70.6%.
Electric vehicles have seen especially strong growth on the back of long-standing government support. The production and sales of clean energy vehicles within China reached 1.65 million and 1.586 million respectively, for YoY increases of 27.7% and 26.2%.
Data from the General Administration of Customs (GAC) indicates that in the first quarter, China’s exports of electric passenger vehicles, lithium batteries, and solar cells (referred to collectively by Chinese officials as the “three items”) totalled 264.69 billion yuan, for a YoY increase of 66.9%. The three items collectively accounted for 4.7% of China’s exports, up 1.7 percentage points from the previous year.
Bai Ming said China enjoys a dominant position in the clean energy vehicle sector in terms of both market share and technology.
“The significant increase in the export growth rate for the ‘three items’ in the first quarter of this year once again demonstrates China’s competitiveness in this area. In the rapidly expanding market of clean energy vehicles, we must maintain our advantage to stabilize our international market share.”
Support for cross-border e-commerce
The State Council has flagged greater support for exports facilitated by China’s burgeoning e-commerce platform sector.
According to data released by GAC, in 2022 China’s cross-border e-commerce trade volume reached 2.11 trillion yuan, for a YoY increase of 9.8%. Data from the Ministry of Commerce further indicates that in 2022, the growth rate of China’s cross-border e-commerce trade volume exceeded the overall growth rate for foreign trade by 2.1 percentage points.
The Opinions call for foreign trade enterprises to expand sales channels and cultivate independent brands through new business forms and models including cross-border e-commerce.
“[The State Council] encourages local governments to combine industrial and endowment advantages, innovate and build comprehensive pilot zones for cross-border e-commerce, actively develop the ‘cross-border e-commerce + industrial belt’ model, and drive cross-border e-commerce enterprises to export to other businesses.”
In 2022, the State Council agreed to the establishment 33 new comprehensive cross-border e-commerce pilot zones in cities and regions including Langfang, Cangzhou, and Yuncheng. The move brought the number of such zones in China to 165.
The Opinions also highlight the need to accelerate the introduction of guidelines for the protection of intellectual property rights in cross-border e-commerce, and guide cross-border e-commerce enterprises to prevent intellectual property risks.
The State Council plans to:
- Build an online comprehensive service platform for the comprehensive cross-border e-commerce pilot zones. Guide enterprises to use tax policies and measures related to cross-border e-commerce retail exports.
- Continue to improve the assessment and evaluation mechanism of the comprehensive pilot zone for cross-border e-commerce.
- Make effective use of evaluation results to give full play to the role of strong pilot demonstrations.