China’s foreign trade is expected to maintain momentum this year despite various challenges like high raw material and energy costs. The profitability of Chinese exporters in sectors like railway and aviation-related equipment manufacturing, shipbuilding and automobiles, has improved during the third quarter of this year, according to a survey by the China Council for the Promotion of International Trade (CCPIT). Major issues that troubled export-oriented companies in the first half, like high costs of logistics, capital and exchange rates, have eased, the survey report stated. Responses from 2,043 export-oriented companies were collected for the survey in late August on their business outlook and market expectations for the third quarter. The effects of various policies that were rolled out to stabilize foreign trade in the first half, started to show in the third quarter, said Sun Xiao, Spokesman for the Beijing-based CCPIT. As domestic exporters' confidence grows, more and more Chinese companies are getting proficient at both adapting favorable policies under the framework of the Regional Comprehensive Economic Partnership (RCEP) agreement and growing new formats of foreign trade, including cross-border e-commerce, said Sun, who is also the Secretary General of the China Chamber of International Commerce.
Despite facing headwinds from weakening overseas demand, more than 30% of Chinese exporters are expected to achieve year-on-year growth in annual trade volume, about 4.09 percentage points higher than in the second quarter, the survey found. China’s foreign trade surged more than 10% year-on-year to CNY27.3 trillion during the first eight months of this year, according to the General Administration of Customs.
Yet, the annual growth pace in August was 8.6%, down nearly 8 percentage points from July. The slowing growth of exports came amid the increasingly complex environment, with both the global economy and international trade facing unfavorable conditions. For the government, it is necessary to introduce new policies to ease pressure on businesses and stabilize foreign trade, said Zhang Yongjun, Researcher at the Beijing-based China Center for International Economic Exchanges. Even though supported by smooth domestic logistics and well-developed industrial and supply chains, China’s exporters must further diversify their market layout and avoid risks, as European countries and the United States are facing potential recessions. If the current situation continues, it could slow growth of external demand, he said.
Zhou Maohua, Analyst at China Everbright Bank, said China’s export structure has been notably optimized, with exports of electro-mechanical products – computers, vehicles, smartphones and the like – increasing proportionately in foreign trade. He said this pattern has also reshaped China’s role from a manufacturer of low-end products like furniture and travel cases to a provider of high value-added products like electric vehicles and liquefied natural gas carriers. Exports of electromechanical products rose by 9.8% year-on-year to CNY8.75 trillion between January and August, accounting for 56.5% of the nation’s total export value.
Chinese makers of heating appliances, including electric blankets and electric heaters, have seen explosive growth in exports to Europe as the continent heads into winter in the throes of an energy crisis amid rising prices of natural gas, industry experts said. Statistics from AliExpress, Alibaba Group’s business-to-customer (B2C) site that sells consumer goods to overseas markets, showed sales of heating appliances, such as electric blankets, in the European market surged nearly 300% in September compared with August. Sales of Chinese heating appliances in France, Germany and Poland skyrocketed 306%, 303% and 297% month-on-month, respectively, during this period, given that European consumers are expanding their purchases of heating appliances ahead of the approaching winter.
Moreover, there is surging demand for heat pump water heaters, which gather ambient warmth from the air and compress it to heat up water, especially in Germany, Poland, the Netherlands and the United Kingdom, with orders soaring more than 100% year-on-year in the past 90 days, said Alibaba.com. In July, the European Union’s 27 member states imported 1.29 million electric blankets from China, an increase of 150% compared with 521,000 in June. Chinese home appliance brand Midea Group is upgrading its heat pump products, which could reduce carbon emissions by 60% to 80% compared with coal-fired boilers so as to address the natural gas shortage in Europe. In the first seven months, exports of Midea’s heat pumps surged 215% year-on-year, the China Daily reports.
