Transformation and upgrade of foreign trade commodity structural transformation and upgrade

A leap from “Made in China” to “Created in China”
Feb 14, 2019  |  by
Recently, Zou Zhiwu, a member and Deputy-Director of the CPC Committee of the General Administration of Customs, P. R. China, delivered a speech on the “Guoshi Forum 2018 Annual Meeting” themed on “New Era: Reform and Opening-up,” pointing out that growth of China’s foreign trade has been the best miniature of historical achievements and changes made by China since China’s adoption of the reform and opening-up policy. Over the past four decades, China’s foreign trade scale has been expanding, turning China from a large trade destination into a trade superpower. Similarly, China’s foreign trade commodity structure has been transformed from “Made in China” to “Created in China.”
 
Gradual upgrade of the foreign trade scale
Zou Zhiwu said China’s customs work is at the forefront of China’s reform and opening-up, which has witnessed the legendary growth of China’s foreign trade since the reform and opening-up period.
 
Zou introduced, over the past four decades, China’s foreign trade scale has realized steady progress from a large trade destination to a trade superpower. In 1999, China’s foreign trade listed itself into the top 10 of global trade. Following China’s entry into the World Trade Organization (WTO), China’s reform and opening-up process has been ushered into an all-around, multilayered and cross-field historical period. In 2004, China’s foreign trade volume surpassed one trillion USD the first time, which doubled in 2006 to exceed two trillion USD. It took just three years for China’s foreign trade to realize the impressive leap, but the same leap took America and Germany around eight years to materialize. In 2009, China’s export overtook that of Germany to become the largest exporter in the world. In 2013, China overtook the United States to become the global largest goods trade destination. Over the past 40 years, China’s goods import and export grew by 198 folds in total, and China’s contribution to global import and export has soared up from 0.77% in the very beginning to the current 11.48%.
 
Zou added that the past four decades have seen a China playing a growingly important role in foreign trade, injecting the economic growth of China and the world with a robust driving force. Foreign trade is a booster of economic growth. China’s foreign trade has been growing at an average annual rate of 14.5%, which is significantly higher than the annual average growth (11.9%) of China’s GDP over the same period. This is the outcome calculated by USD. As one of the three drivers of economic development, export growth can vigorously promote expansion of the domestic industrial production.
 
Over the past 40 years, China’s export international share has risen from 0.8% in 1978 to 12.8% in 2017. Currently, China’s international market share in exporting 1,400 commodities ranks No. 1. Foreign trade is also a stabilizer of employment expansion. At present, there have been around 200 million people getting employed, either directly or indirectly through China’s foreign trade development. Moreover, foreign trade is a balancer of international balance of payments. With the continuous widening of China’s trade surplus, foreign trade will play a bigger role in increasing foreign currency reserve.
 
Zou said the trade surplus in 2005 exceeded 100 billion USD in 2005, and the figure for 2015 reached a record high of around 593.9 billion USD. During the same period, China’s foreign exchange reserve climbed from less than one trillion USD to more than three trillion USD. So far, China’s foreign trade has been one of the major engines to boost the world’s trade growth. Economies, either developed or emerging, show a growing reliance on China’s trade. Now, China has been the largest trade partner of 130 countries in the world. This suffices to show that China has undoubtedly become the mainstay in the world’s trade activities.
 
Transformation and upgrade of the foreign trade commodity structure
According to Zou’s introduction, China’s foreign trade commodity structure has been transformed from “Made in China” to “Created in China” over the past four decades. In the first three decades following China’s adoption of reform and opening-up, China’s export started from scratch to sell goods “Made in China” to countries all over the world. In the recent ten years, China’s foreign trade has switched from the high-speed development stage to the high-quality development stage. The influence of “Created in China” is deepening. China’s export is gradually getting rid of its reliance on resources and labor force. The export-oriented industries have been gradually transformed from the traditional labor-intensive industries, such as light textile, to the capital-intensive and technology-intensive industries represented by the equipment manufacturing industry, new-and high-tech industry, etc. China’s high value-added products, including high-speed railway, aerospace and communication equipment have been expanding their overseas market.
 
Zou said that the largest export goods of China in 1986 were textile products and apparels. In 1995, electromechanical products replaced textiles and apparels to become the No. 1 export goods. This also symbolized the transformation of China’s export goods from labor-intensive ones to capital-intensive or technology-intensive ones. In 2003, electromechanical products took up half of China’s export volume the first time. In 2011, the export of China’s electromechanical products exceeded one trillion USD. In 2017, the figure grew to 1.32 trillion USD, accounting for nearly 60% of China’s total export volume and reaching a record high in history.
 
Over the past four decades, China’s foreign trade subjects have been blooming from monopolization of state-owned enterprises to rapid development of foreign-invested enterprises to sudden rise of privately-employed enterprises. Before 1992, state-owned enterprises and foreign-invested enterprises were the only players in China’s foreign trade market. In 1993, privately-employed enterprises appeared. In 1998, foreign-invested enterprises overtook state-owned enterprises to become the largest player in China’s import and export market.
 
Since 2008, the performance pf privately-employed enterprises has been impressive. The total import and export volume of Chinese privately-employed enterprises had increased from 536 billion USD in 2008 to 1.5815 trillion USD in 2017, registering an average annual growth rate of 12.8%. The growth rate was higher than that of China’s total import and export by 7.4%, and its percentage in the national import and exported climbed from 20.9% to 38.5% by a large margin.

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