The Impact of COVID-19 on China’s Foreign Trade

張潤祺

Abstract：The global spread of Covid-19 will exert extremely negative impact on the world economy.Not only the foreign trade development of China and Chinese enterprises，but also the international image of China will face more threats in the future.Sino-US relations may deteriorate in the absence of effective communication.We need to adopt appropriate fiscal and monetary policies，find more new growth points of Chinas foreign trade to restore the strong momentum of Chinas economic development，and get prepared to deal with trade frictions and disputes as soon as possible.

Keywords：COVID-19 epidemic;international trade;Sino-US relation

Since the beginning of 2020，the sudden outbroke of COVID-19 in Wuhan has made our country suffered a lot.With the efforts of all regions and departments to advance both the prevention and control of the pandemic，the domestic situation has improved markedly.However，the global spread of the COVID-19 epidemic has triggered trade restrictions and embargoes that have directly undermined the international free trade system and have produced severe trade destruction effects，which will have a certain negative impact on Chinas import and export trade as well as the international image of our nation.

From my point of view，the COVID-19 will affect Chinas foreign trade in the following ways：

First and foremost，the foreign trade volume of China will decrease significantly this year.On one hand，the outbreak of the COVID-19 in China caused numerous of factories and foreign trade enterprises stopped working for several months，especially those not directly related to medical supplies production.On the other hand，as the virus spread to all over the world，it has already become a global “black swan” event.By the end of May，more than six million people had been infected，however，the specific drug for the virus has not been developed so far.Therefore，more and more countries have been taking measures to limit the international movement of people and cargos.Import and export enterprises have to give up part of their overseas orders to avoid the loss of delay warehousing，order defaults and frustrated overseas.According to the data from the MOFCOM（The Ministry of Commerce of the peoples Republic of China），in the first two months of 2020，the total value of Chinas import，export and foreign trade had decreased by 2.4%，15.9% and 9.6% respectively.

Secondly，domestic foreign trade enterprises will face new pressures and challenges for a long time.As we all know，transportation occupies a profoundly significant position in the international trade，and the freight is an essential component of the price of commodities.Unfortunately，from a research made by the General Administration of Customs recently，we found that 34% of the enterprises reported increasing pressure on international logistic costs.The air freight of many routes even has increased several times.At the same time，due to the impact of the epidemic on international logistic enterprises，the labor shortage and sharp reduction of flights and vessels have led to a serious decline in transport capacity，making the situation even worse.

Last but not least，due to the malicious slander from countries led by the United States，the international image of China has been negatively affected.In addition，relations between China and the United States will deteriorated further if we do not take effective measures and communicate with American government in a peaceful way.Historically speaking，when a new country rises and becomes more and more powerful，the traditional super power which has a dominant position in the world，will exhaust all the efforts to contain and hold back the new countrys development.Since president Trump came into power，the US government began to pursued the concept of “American First”，which has generated a obviously anti-globalization effect.As the most important trade partner of China，the US started a trade war with us in 2018，which made both sides lost.Even though the two sides had reached an economic and trade agreement in January 2020，the epidemic will pose a huge threat to it.For instance，according to the first-phase economic and trade agreement between the US and China，by the end of 2021，China will need to increase its import of manufactured goods，agricultural products，and energy products as well as services from the US by no less than 200 billion US dollars，however，the impact of the epidemic will bring us huge import pressure since domestic demand are decreasing.Once disputes about the agreement arises，the Sino-US relationship will turn from détente to tension again.

In a conclusion，we have reached an important historical turning point.As the pandemic still rages globally，the changing external environment has posed challenges for China to secure the goal of building a moderately prosperous society in all respects and shaking off absolute poverty before the end of this year.In terms of policy response，the following measures should be taken to help our country overcome this difficult period and support for the development of foreign trade enterprises：

Firstly，turn the export-oriented developing model to boosting domestic demand.Although a deficit occurred in exports，the sale of daily necessities and online retail sales of physical goods continued to grow in China，we should support and encourage foreign trade enterprises that temporarily lose orders due to the epidemic to participate in the domestic economic activities，maintain their production capacity，and guide relevant enterprises to realize the transformation to coordinate both domestic and international markets.

Secondly，adopt more proactive fiscal policies and moderately relaxed monetary policies.On one hand，the former can prevent a sharp recession of the economy.On the other hand，the later can restore the foreign trade development quickly.For example，by extending the loan repayment period of enterprises influenced by the epidemic，we can alleviate the financial pressure of them.

Thirdly，promote bilateral cooperation and enhance the influence of the Belt and Road Initiative and a community with a shared future for mankind.Although affected by the outbreak of COVID-19，however，trade with ASEAN and countries along the Belt and Road maintained growth，with the trade value growing by 2% and 1.8% each.While more and more developed western countries influenced by the epidemic，ASEAN and countries along the Belt and Road may become the main growth point of Chinas foreign trade in 2020.Meanwhile，we need to actively promote multilateral international organizations to conduct consultations and cooperation to prevent the spread of the epidemic，to alleviate the adverse impact on international trade.Globalization is the trend of history，in face of the epidemic，no countries can manage alone or stand aloof，on the contrary，every one of us can reap huge benefits in the process of forming a community with a shared future for mankind.

Finally，to deal with the Sino-US relation issue properly，we should not only be prepared for further deterioration，but also strive to defuse the high-intensity confrontation that may result from misunderstanding.As the country with the most advanced medical technology in the world，unexpectedly，the US had more than 1.9 million cases，making it the country with the most COVID-19 cases.In my opinion，Donald Trump is a successful businessman，but far from a competent president.The outbreak of the epidemic ended the “Trump Boom”，and his performance during the epidemic is reminiscent of President Hoovers during the Great Depression.As far as Im concerned，as the worlds two largest economies，China and the United States should strengthen cooperation to prevail over the pandemic at an early date.Just as Chinese Ambassador to the US Cui Tiankai said，“blaming China will not end this pandemic”.