The Ministry of Commerce has released new figures on China’s trade volume, signalling a relatively stable trend and a transition of the country’s economic structure. The Ministry also commented on the recent devaluation of the yuan.
China’s trade figures continued to fall by the end of July. Data from the Ministry of Commerce shows that from January to July this year, China’s exports plunged around 1 percent, while imports witnessed a significant 15 percent drop.
Authorities say the results demonstrate that China’s economic structure is going through a transition.
“The fall in China’s exports is mostly found among labor-intensive enterprises engaged in processing the supplied materials. Exports in machinery, on the contrary, continues to see a stable rise. For example, cellphone exports climbed around 15 percent, and exports of ship products rose over 6 percent,” Chinese Ministry Of Commerce spokesperson Shen Danyang said.
Meanwhile, the figures also suggest a shift in China’s export destinations. According to the Ministry of Commerce, countries along the “One Belt, One Road” witnessed a sharp increase in China’s exports.
Exports to India increased nearly 10 percent, Thailand 16 percent, and Vietnam 12 percent.
On the contrary, Japan has witnessed an 11 percent drop in China’s export, and Hong Kong 10 percent. This seems to be shaping choices made by domestic manufacturers.
“China’s central and western regions are gaining advantage in exports. There is a 1.2 percent drop in exports from eastern coastal provinces, and a 1.1 percent increase in central and western regions,” Shen said.
An unsettling fact for some is China’s recent slump in the currency exchange rate. China’s RMB fell by a record high of around 4 percent last week against the US Dollar. The spokesperson was questioned whether it is an intentional action by Beijing to boost exports.
“RMB devaluation is a double-edged sword for China’s trade. For labor-intensive exporters, it might be positive. But for many other companies engaged in imports or having foreign debts, this would increase their costs. The reason for the recent RMB devaluation is China’s adjustment of a technical mechanism called “middle rate pricing mechanism”. This reform would help improve the marketization of the yuan’s exchange rate,” Shen said.
The Ministry of Commerce says the slow global economic recovery is adding to the uncertainty of China’s international trade in the next half of the year. The country says it will maintain its current pace of reform and development, and urges other countries to refrain from trade protectionism.