What’s new: Growth in China’s foreign trade this year is facing “unprecedented difficulties” stemming from both supply and demand uncertainties, an official at the Ministry of Commerce warned.
Global demand could be affected by a delay in the global economic recovery amid Covid-19 outbreaks, Li Xingqian, head of the ministry’s Department of Foreign Trade, said at a press briefing on Tuesday.
“The rapid withdrawal of stimulus policies in some countries may lead to shrinking demand and price fluctuations, which in turn may affect relevant Chinese industries’ exports,” Li said.
From the supply side, the restructuring of global industrial and supply chains has seen developed countries pushing to bring manufacturing back home, which could result in lower efficiency in global resource allocation, Li said. At the same time, surging costs of raw materials, issues with logistics and transportation, and shortages of key components such as semiconductors will continue to contribute to global supply chain disruptions, he added.
Despite these headwinds, Li said that the country will focus on improving the quality of foreign trade this year. He also expressed confidence that trade growth will be maintained in a “reasonable range” for the full year.
The background: Li’s comments reiterate the chorus of forecasts from analysts and other government officials that the unexpected export strength that powered China’s economic expansion last year will likely lose momentum.
China’s total imports and exports of goods rose 30% to reach a record $6.05 trillion in 2021, customs administration data show.
Read more China’s Goods Exports Face Increasing Headwinds, Ministry Warns
Contact reporter Kelsey Cheng (kelseycheng@caixin.com) and editor Bertrand Teo (bertrandteo@caixin.com)
Get our weekly free Must-Read newsletter.
