There Is No Need To Overread The Temporary Negative Growth Of China's Foreign Trade.

According to WTO data, in dollar terms, in 2014, Global trade in goods exports increased by 0.3%, China increased by 6.1%, the United States increased by 2.6%, the European Union grew by 3.7% (Germany's growth rate was 3.4%), Japan was shrinking by 3.5%, and was praised by many western public opinion as India's 2.5% growth in catching up with China's hope.

In 2015, exports of global goods trade shrank by 13.5%, China shrank by 2.9%, the United States shrank by 7.1%, the European Union shrinks 12.5% (of which Germany shrank 11%), Japan shrank by 9.5%, and India shrank by 17.2%.

If we look closely at the growth trend of global foreign trade and the qualitative changes that have taken place in China's foreign trade, it is easy for rational market participants and observers to understand that the slowdown in foreign trade growth and the temporary negative growth have not reduced China's share and status in the international trading system, and there are also bright spots in the temporary difficulties.

First of all, price changes exaggerate the degree of growth and decline in China's foreign trade since 2013.

The main body of China's export is manufactured goods.

During the period from 1997 to 2013, the price of international trade manufactured goods in dollar terms rose overall, with an average annual increase of 0.3% from 1997 to 2006. The 2007 to 2012 increase was 5.7%, 6.2%, -5.6% (sub prime mortgage crisis), 2.4%, 6.4% and 0.5% respectively.

However, from 2013, the price of international trade manufactured goods in dollar denominated went down, and the decrease in 2013 to 2015 was -1.1% and -0.6% respectively (the price index of China's export commodities decreased by 0.7%) and -4.1%.

Secondly, due to the change of growth base, the increment of smaller foreign trade now is equivalent to the super high speed increment in the past.

10 years ago, the growth rate of China's foreign trade export was 20%, and the annual export increment was about 40 billion US dollars, which is only 2% of the current export increment.

Therefore, in 2016, the "government work report" of the two sessions of the two countries did not mention the index of foreign trade growth, but positioned itself as "stabilizing to the good". The weight of this "stable" word is actually not light. Even if the export growth is only 1% to 2%, the increment of foreign trade is equivalent to the performance of the super high speed growth period in the past.

Third, China's trade surplus continues to expand.

In 2014, China's export volume increased by less than GDP, but the trade surplus was 382 billion 460 million US dollars, an increase of 47.3% over the same period last year.

The trade surplus in 2015 was 3 trillion and 690 billion yuan, an increase of 56.7% over the same period last year.

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The sharp increase in the pressure of capital outflow and the increase of trade surplus for two consecutive years not only strongly supported the whole economic growth not avalanche, but also played an irreplaceable role in stabilizing the RMB exchange rate and market participants' expectations.

Compared with many other emerging market economies whose exchange rate has collapsed in recent years, the significance of China's trade surplus continues to expand.

Fourth, China

The structure is continuing to upgrade and improve, so as to promote the continued improvement of the macro efficiency of foreign trade. This shows that the proportion of general trade continues to rise, and the proportion of exports of mechanical and electrical products has picked up.

In 2014, China's general trade import and export amounted to 2 trillion and 310 billion US dollars, an increase of 5.3%, accounting for 53.8% of the total import and export volume of the whole country, an increase of 1 percentage points over 2013.

In 2015, China's general trade import and export volume was 13 trillion and 290 billion yuan, down 6.5%, accounting for 54% of imports and exports, an increase of 0.3 percentage points over the previous year, and the proportion increased for third consecutive years.

In those days, China exported 8 trillion and 150 billion yuan of mechanical and electrical products, an increase of 1.2%, accounting for 57.7% of the total value of exports, up 1.7 percentage points from the previous year (2014).

Fifth, the global economy has entered a period of low growth.

It may even be stepping into a period of negative growth that will continue for a considerable period of time. Although China's foreign trade decelerated and experienced a temporary negative growth, it was still better than the performance of Global trade and major competitors, pushing China's position in the international trading system to go up and down.

It can be judged that the slowdown in foreign trade growth has become a major trend in the coming period.

The main reason is the overall slowdown of external market growth. It is estimated that the world economic growth rate in the second and even third ten years of this century will not reach the level of twenty years ago. Moreover, our share of world trade is much higher than before. Therefore, we can not expect that foreign trade can maintain the growth rate of two digit, or even twenty or thirty percent, in the first ten years.

When China's exports account for only 1% of the world's total, the rapid growth of exports can still be achieved when the global economic and trade is stagnant, because even if global trade is growing at zero and China's exports doubled, it will only increase from 1% to 2%.

But in China, many of the world's market share of export commodities has been very high. China's foreign trade can no longer be left alone when the global economy and trade are in decline.

At the same time, as the international division of labor is changing, the world trade has seen a significant deceleration or even a sharp decline in the global trade due to the cost changes and other reasons. The slowdown in China's foreign trade growth and the temporary negative growth are generally in sync with this trend, and the decline is less than the global level and the main competitors. Therefore, China's position in Global trade has not declined, but has continued to improve.