Belt & Road Trade 30% Of China’s Total During H1 2020
Belt & Road Initiative Nations and ASEAN Winners In The First Half Year Results
China’s General Administration of Customs (GAC) said yesterday that following turbulence due to the Covid-19 outbreak in the first quarter of 2020, imports and exports of the second quarter showed signs of recovery and stability, and China’s exports have risen for three consecutive months, according to GAC spokesman Li Kuiwen.
Trade with countries that have signed up to China’s Belt & Road Initiative now accounts for 29.5 percent of China’s total trade volume, increasing a moderate amount by 0.7% year on year, driven by active cooperation in Covid-19 control, the establishment of digital smart customs, as well as an overall increase in China-Europe freight trains. This indicates that the Belt & Road is developing as an anchor of stability for the global supply chain.
China’s imports of mechanical and electrical goods in the first half of 2020 increased by 1.2 percent year on year, while imports of electronic components, automatic data processing equipment and components, jumped 14.1 percent and 7.2 percent, respectively.
China has actively expanded imports by relaxing certain tariffs from Belt & Road nations and is allowing the purchase of more commodities from more countries. China’s imports of meats and grains, are up 107.3 percent and 18.1 percent, respectively.
In terms of Chinese exports, as can be expected the export of medical supplies increased, with sales of textile products including face masks, pharmaceutical products and medical equipment expanding by 32.4 percent, 23.6 percent and 46.4 percent, respectively.
Driven by the stay-at-home economy springing up this year, exports of laptops and mobile phones went up by 9.1 percent and 0.2 percent.
Overall, Foreign trade in H1 2020 decreased 3.2 percent compared with the preCovid period last year, and amounted to about US$2 trillion. There are signs of receovery however, as China saw its foreign trade rise 5.1 percent year on year last month (June) with exports and imports both up 4.3 percent and 6.2 percent respectively.
Other Trade Partners
ASEAN became China’s largest trading partner so far this year with trade up 5.6 percent year on year to RMB2.09 trillion, accounting for 14.7 percent of China’s total foreign trade.
The expansion was partly buoyed by growing interconnectivity in electronic manufacturing between China and countries like Vietnam, Malaysia and Singapore along the global supply chain. Integrated circuits, for instance, saw imports from and exports to ASEAN grow 23.8 percent and 29.1 percent, respectively, in the period.
European Union & United States
During the same period, trade with the European Union and the United States decreased 1.8 percent and 6.6 percent, respectively, GAC data showed.
Expected China Trade Patterns H2 2020
Zhang Yansheng, chief researcher of the China Center for International Economic Exchanges has stated that it is only a matter of time before China’s foreign trade recovers to the normal level of the past as countries loosened trade restrictions and domestic demand increased quickly.
In the second half of 2020, Zhang predicts that China’s foreign trade recovery will accelerate, with players maintaining higher efficiencies in their industrial and supply chains, adapting to Covid-19 issues such as diversifying, and are more likely to secure a better performance.
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Silk Road Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Asia, and assists foreign investors into the region. For strategic advisory and business intelligence issues please contact the firm at firstname.lastname@example.org or visit www.dezshira.com