Belt and Road strategy pushes China's trade to rally
As European and U.S. markets are warming up and the Belt and Road construction begin to gradually take effect, the performance of China's foreign trade last month was better than expected.In terms of U.S. dollar, exports and imports increased 8.7 per cent and 14.8 per cent respectively, and exports and imports in the first five months of this year rose 8.2 per cent and 19.5 per cent.Form this, it can be seen that China's trade is taking a turn for the better. Exports in the whole of this year is likely to bottom up, which has a positive impact on this year's economic growth.
Although renminbi (RMB) becomes stronger against the U.S. dollar this year, it does not hurt China's trade.China's exports to U.S. went up nearly 20 per cent in the first five months of this year.This not only indicates demand in China's export markets are rallying, but also highlights that China's industrial restructuring and upgrading begins to take effect so that it keeps improving the quality and competitiveness of its exported goods.More importantly, China's infrastructure investment in countries along the Belt and Road is increasing rapidly, which boosts China's exports of engineering projects and equipment.This is also an important, crucial factor for the growth of China's trade.
As a matter of fact, the Belt and Road construction has already become an accelerator for China's economy and trade.After the conclusion of the Belt and Road Forum for International Cooperation, President Xi Jinping paid his first foreign visit to Kazakhstan where the Silk Road Economic Belt was initiated four years ago, taking the opportunity to deepen China-Kazakhstan economic and industrial cooperation to push forward the Belt and Road construction.
This year, in fact, global politico-economic environment faces multiple uncertainties and unstable factors, including general elections in several European countries and geopolitical risks, which may have an unfavourable impact on global trade.But hitherto it seems more threatening than really hurting. This is the main reason why European and U.S. market demand is reviving against market expectation.
However,the World Bank recently did not follow the International Monetary Fund (IMF) to adjust upward its forecast about global economic growth this year, believably because there are still multiple unknown variables in the greater economic environment.Whether the good momentum for Chinese and global trade to rally could be maintained remains a deep concern.
It is noteworthy that with the increase of China's outbound investment, its industrial restructuring and upgrading and acceleration of the Belt and Road construction, new driving forces will incessantly be injected into China's foreign trade.
According to a United Nations Conference on Trade and Development report, with its outbound investment grew 44 per cent last year to reach US$183 billion, China becomes the world's second largest investing country.This helps boost growth in multilateral trade.It can be expected that total volume of China's trade and even that of global trade will further expand.
China continues to contribute to world economic growth.It is expected that in upcoming five years, China's average annual outbound investment will be between US$120 billion and US$130 billion, of which a considerable proportion will be invested in infrastructure construction in countries along the Belt and Road.
As a matter of fact, China's investment in Belt and Road countries in past four years exceeds US$60 billion.Last year alone, engineering-project agreements signed were worth US$126 billion in total.Exports of high-end equipment such as express rail and nuclear power equipment are bound to become a shining point, showing a positive change of upgrading from quantity to quality in China's exports.
At the same time, China plans to import US$2 trillion worth goods from countries along the Belt and Road in upcoming five years.This shows that the whole world will be commonly benefited by the Belt and Road initiative under the principle of mutual benefit and win-win.
Because of the better-than-expected performance in foreign trade, China's economy can remain stable with good momentum for growth.Its growth goal for this year can well be attain.