Market News International:

In January-February, export and import year-over-year growth slowed from December. What is your interpretation of this data? And, what is the outlook for trade in the coming months given rising trade tensions? Thank you.

Fu Linghui:

Thank you for your questions. Indeed, given the complex and volatile international landscape, developments in foreign trade have drawn a lot of attention. Since the start of this year, global economic recovery has been sluggish, and trade restrictions have grown tighter, presenting mounting challenges to economic and trade growth worldwide. Amid the complicated external environment, China's imports and exports dipped marginally, influenced in part by a lower number of working days relative to the previous year. However, after adjusting for incomparable factors, our imports and exports maintained stable growth. In the first two months of the year, China's total imports and exports of goods fell by 1.2% year on year. However, according to the customs authorities, after adjusting for incomparable factors, imports and exports actually increased by 1.7%. Specifically, exports continued to grow, especially for key products such as machinery and electronics. This growth demonstrates the strong international competitiveness and resilience of China's foreign trade in a complex and challenging global environment. This is evident in several aspects.

First, from the perspective of major trading partners, imports and exports to the Association of Southeast Asian Nations (ASEAN) and the United States continued to grow. In recent years, as the Regional Comprehensive Economic Partnership (RCEP) has been further implemented, trade between China and ASEAN countries has maintained good momentum. This year, China-ASEAN trade continued to grow, with bilateral trade increasing by 4% year on year in the first two months. Despite higher tariffs and other constraints, the complementary nature of China-U.S. trade has remained evident, with trade in goods continuing to grow. In the first two months of the year, bilateral trade increased by 3.5% year on year.

Second, in terms of trade entities, imports and exports by private enterprises continued to grow. In recent years, private enterprises have actively expanded into international markets, playing a crucial role in driving foreign trade growth. Looking at this year's situation, private enterprises have actively responded and adjusted to the complex changes in the international market. They have taken the initiative to explore new areas of foreign trade, and the effects are becoming evident. In the first two months, private enterprises saw their imports and exports rise 2% year on year, outperforming the broader foreign trade sector.

Third, in terms of commodities, exports of mechanical and electrical products experienced strong growth. With ongoing industrial upgrading in China, mechanical and electrical products have become increasingly competitive, fueling sustained export growth in sectors such as integrated circuits and automobiles. In the first two months of the year, China's exports of mechanical and electrical products grew 5.4% year on year. Within this category, exports of automatic data processing equipment and components rose 11.7%, integrated circuits 13.2% and automobiles 3.7%.

Looking ahead, China's foundation for large-scale foreign trade remains solid, as it maintains its position as the world's largest trader of goods and second-largest in services trade. With diverse and stable economic and trade relations, China has become a major trading partner for more than 150 countries, creating ample opportunities for foreign trade development. Moreover, China boasts a complete industrial system and strong supporting capabilities. As a result, "Made in China" products are gaining increasing global recognition. Meanwhile, foreign trade enterprises are actively participating in the international division of labor and cooperation. Additionally, new growth drivers, such as green trade and digital trade, are constantly emerging. Collectively, these factors will support China's foreign trade development.

In the next stage, although the international environment has become more complex and severe, the trajectory of mutually beneficial cooperation will not change. China's firm commitment to opening up wider to the world will not change. It has a complete industrial system, its innovation capability continues to grow, and there is a foundation and conditions for the steady development of foreign trade, which will also create new opportunities for global economic and trade development. Thank you.