China 2016: Chinese companies are preparing for expansion in foreign countries
The Chinese Foreign Trade by the Ministry of Commerce (MOFCOM) has just published its report on the third quarter of 2016. This report shows that after a slow start, foreign trade in China managed to recover in the third quarter.
The report shows that in the first three quarters general trade exceeded that of foreign trade. With a value of RMB 9.82 trillion, general trade made up 56% of the total. The official report suggests that Chinese companies are developing capacity for expanding into international markets. State-owned enterprises (SOEs) and foreign-invested enterprises (FIEs) experienced a decrease in foreign trade. However private enterprises have managed to maintain growth since the beginning of 2016. Especially cross-border e-commerce, market purchasing trade and comprehensive foreign trade service enterprises have done remarkably well.
This signals a trend that China is upgrading its exports. Even though electro-mechanical products and traditional labor-intensive products remain China’s major exports, they decreased. The report emphasizes that exports of several high-tech products, such as aerospace products, solar batteries, medical equipment and instruments, storage batteries increased. While bilateral trade with the US and ASEAN declined, exports to Japan and the EU rose. Also exports to the “One belt one road” countries also remained strong.
This report clearly shows that foreign trade in China is gradually changing in line with the country’s broader economic transition towards higher value-added manufacturing and services. From “Made in China” to ‘Created in China” so to speak. For foreign companies this means they have to pay more attention to the sectors mentioned above and we might also expect more investments from these companies abroad.