Sunday, March 3, 2024

‘Be bolder’: China’s economic powerhouse strives to boost exports as Beijing demands more responsibility

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“I later learned that my colleagues had also received calls and asked if they needed help setting goals,” he said. “Next year, I was told to be ‘more bold’ with a ‘medium to high’ growth goal.”

02:39

China’s economy is expected to recover faster than expected in the third quarter

China’s economy is expected to recover faster than expected in the third quarter

It’s not just exporters like Hong who are rallying together. Chinese leaders are beating the drum for the country’s economic giants to “take greater responsibility” in supporting the country’s development. economic recovery and stabilize growth.

These powerful countries typically refer to Guangdong, Jiangsu, Zhejiang, Beijing, Shanghai, Shandong, and Fujian, each with a gross domestic product (GDP) of 3 trillion yuan (4210 yuan) in the first three quarters of this year. billion US dollars), accounting for 46% of the total. National total.

Even tone settings Central Economic Work Council At a meeting earlier this month, the world’s largest exporter vowed to strengthen its trade base with the rest of the world.
Zhu Tian, ​​a professor at the China-Europe International Business School in Shanghai, said the “increased responsibility” of powerful provinces means their growth rate should not fall below record highs. country levelThis is widely expected to be set at around 5% again in 2024.

“As long as you achieve your growth goals, it’s not necessarily counterproductive.” [being negotiated and assigned] It’s realistic,” Zhu said. “What matters is whether exporters are ‘freed up’ to pursue their goals and have the confidence to invest.”

China’s total foreign trade is first 11 months Sales in 2023 decreased by 5.6% from the previous year to USD 5.4 trillion. Net exports pushed down GDP growth by 13% in the first three quarters, compared to investment’s contribution of 29.8% and consumption’s contribution of 83.2%.
However, exports in November turned positive for the first time in six months, and are expected to continue to do well in 2024, and the outlook for the future is improving. Expected rate cut One from the US Federal Reserve and another from a new replenishment cycle by Western retailers.

A customs official in the coastal city of Ningbo told local media earlier this month that a recent survey of companies pointed to “resurgence of optimism on the ground,” with more exporters reporting an increase in orders. .

Ningbo is home to one of China’s largest container ports.Photo: Xinhua News Agency

Hong, who also lives in Ningbo, said he expected shipments to Walmart in the US and Tesco in the UK to increase next year to replace lost orders. His company’s exports began to plateau in mid-2022, before plummeting 20% ​​this year to US$7 million.

They were asked to set bolder goals for next year and work hard to achieve them, so they were interested in tips on how to provide appropriate support from local governments.

In fact, according to several exporters interviewed by the Post, one of the government’s signature policies was to match bounties on new exports. There could also be cash allowances to encourage exporters to attend trade shows to find opportunities, as well as seed funds for development. belt and road It is an important destination where the Chinese government is encouraging diversification from developed markets.

For Ningbo, which has a vast manufacturing industry and one of the world’s largest container ports, higher export growth targets are essential if its GDP is to surpass 2 trillion yuan and enter the country’s elite league of top 10.

The city’s GDP is expected to reach 1.7 trillion yuan in 2023, ranking 12th in the country. This means that if the goal is set for him to complete one year, the nominal growth rate will be 17.6%.

“This is like the Chinese government giving Zhejiang province high goals, the province passing them on to trading hubs like Ningbo, and then the city rushing to ask companies at the heart of its export economy to do more. ,” said Chi Qiaoyu, deputy director of the ministry. Ningbo Foreign Trade Service Center is under the jurisdiction of the Municipal Bureau of Commerce.

Former Beijing official urges return of foreign investors, welcomes U.S.-China trade

foreign trade It is a pillar of the city’s economy. The total import and export value increased by 0.8% year-on-year to 1.17 trillion yuan in the first 11 months. Private companies contributed more than 75% of the total, or 884.3 billion yuan, an increase of 4.8% from the previous year. In terms of size, Ningbo has already surpassed the first-tier city of Guangzhou and ranks fifth among China’s top foreign trade cities.

For regions like Zhejiang Province, which covers Ningbo, trade needs to be boosted to drive growth. The province’s trade dependence (trade as a percentage of GDP) was 60% last year, compared to 80% for Ningbo. The national average was 34%.

Zhejiang province and Ningbo city, like the rest of the country, will hold an annual people’s congress early next year, where they plan to announce economic targets such as GDP growth.

Officials say the goal of achieving a GDP of 2 trillion yuan, or becoming a top 10 city, is in fact set to change in Zhejiang province this month as provincial leaders discuss implementing growth-promoting mandates from the Central Economic Work Council. The decision was reportedly given by party leader Yi Lianhong.

Executives in the state, known for its strong private sector, have been told to “get down to earth” and knock on the doors of businesses to learn about their needs. They are also trying to come up with new support policies.

Other cities such as Ningbo, Taizhou and Yiwu have stepped up support, including easier and cheaper loans, even as orders are expected to trickle back starting next year, according to documents viewed. He has promised to do so.

China’s Zhejiang province aims to increase exports next year to boost the country’s economic recovery.Photo: Xinhua News Agency

Alex Ma, associate professor of public administration at Peking University, said fostering such positive interactions between local officials and businesses could help improve the region’s business environment.

However, the province’s enterprises are accustomed to minimal intervention, and Zhejiang executives are usually “silent”, so the province’s business trends may be affected by the allocation of such growth targets. He pointed out.

“Entrepreneurs should use their own judgment,” he said.

Ma also warned that some of the obstacles to foreign trade are “structural or political” and cannot be addressed by local governments alone. Beijing’s actions.

After a series of phone calls, Hong finally agreed to aim for 15-20% growth in 2024, subject to securing more support from local authorities.

As external uncertainties and declining relations between China and the West continue to cloud the outlook, questions remain among private entrepreneurs about how much support local governments can provide through funding and policy. ing.

Chen Yi, general manager of Ningbo Dijia VIDA Trading Co., Ltd., said he was satisfied that the government would pay more for travel expenses when attending overseas business exhibitions.

In July 2022, she was lucky enough to be granted special permission to fly to Europe on China’s first special flight chartered by a local government to meet foreign customers, long before China abolished its zero-coronavirus policy. He was one of the many factory and business owners on the plane. The end of last year.

But after more than a year, things didn’t improve, and she found it increasingly difficult to place large orders.

“[Western buyers] Found a backup supplier in Southeast Asia in the last 3 years [of China’s Covid control] “We are demanding further price cuts due to a long trade war and inflation in Europe,” she said.

14:45

A fight you can’t win?US-China trade war, first in 5 years

A fight you can’t win?US-China trade war, first in 5 years

of european union and America These remain Ningbo’s two largest export destinations, accounting for 35 percent of the city’s total trade in 2022. However, its share fell by 2.6 percentage points and 5.4 percentage points in the first three quarters of this year.

Yin Xiuzhen, general manager of China Base Foreign Trade Co., Ltd., was quoted in a Ningbo media report as saying that many of China’s supply chains are mainly built to meet the needs of foreign trade with the United States and the European Union. It was done.

“The world’s factories could repeat the fate of deserted American auto cities like Detroit as production and orders move elsewhere, along with technology and investment,” she warned.

China-Base is one of the largest private export conglomerates in Zhejiang province, with a large number of downstream micro-exporters and OEM (original equipment manufacturing) factories.

Justin Xu, the owner of a lighting equipment company in another city in Zhejiang province, has endured sluggish sales since July 2022. His business’s exports have plummeted 30% this year, which he blames on Western decoupling and “engulfing” competition.

“The government is currently telling us to increase exports next year and shift our focus to Southeast Asia and the Middle East, but if it were that easy to open up new markets, we would have been there long ago.” said.

He added that it took time and money to adapt designs and manufacturing for Western customers to new markets.

Asked what the government should do to really help, Xu said: “Get rid of the wolf warriors already, restore good relations with America and Europe, and allow us to continue trade with them. ” he answered.



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