Foreign Trade Continues to Increase

Chinas foreign trade has maintained its upward momentum in the first half of 2021 after experiencing a strong export performance between January and March.

Foreign trade

Driven by the robust demand due to the rapid recovery in major economies， Chinas foreign trade amounted to RMB 8.47 trillion （USD 1.29 trillion） in the first quarter of this year， up 29.2% year-on-year， according to the latest data released by the General Administration of Customs.

The substantial trade figures are partly due to the low base set in the first quarter of last year when Chinas foreign trade was hit by the COVID-19 pandemic， customs spokesperson Li Kuiwen said.

“However， even compared with the same period in 2018 and 2019， the countrys foreign trade in the first quarter still saw an increase of 25.3% and 20.5%， respectively，” he continued.

With the manufacturing purchasing managers index in major economies further improving in March， officials predicted that overseas economic recoveries will continue to accelerate and support Chinas exports.

The countrys exports soared by 38.7% on a yearly basis to RMB 4.61 trillion in the first quarter， while its imports jumped by 19.3% year-on-year to RMB 3.86 trillion. Its trade surplus surged by 690.6% year-on-year to RMB 759.29 billion， customs data showed.

Thanks in part to the soaring demand for goods in markets in the European Union and the United States and boosted by their governments fiscal stimulus measures， there was significant growth in Chinas exports in the first quarter of 2021， with those to the E.U. rising by 36.4% year-on-year and exports to the U.S. surging by 61.3% on a yearly basis.

“The outlook for Chinas exports， boosted by the global availability of vaccines and stimulus policies， will remain positive this year， with new business models such as cross-border e-commerce emerging as new engines behind the countrys foreign trade，” explained Mei Xinyu， a researcher at the Chinese Academy of International Trade and Economic Cooperation.

Customs data showed that foreign trade through cross-border e-commerce channels surged by 46.5% on a yearly basis to RMB 419.5 billion in the first quarter.

Service imports and exports

In the first two months of this year， Chinas service imports and exports registered a total of RMB 713.98 billion， down by 3.6% year on year. Service exports performed much better than imports， reducing the trade deficit， with the knowledge-intensive service trade gaining a larger share. Compared with the same period in 2019， service exports and imports have fallen by 14.7%. In the breakdown， exports grew by 14.7%， while imports fell by 30.5%. In terms of dollars， service imports and exports accounted for a total of USD 110.35 billion in January and February， up by 3.7% from the same period last year. In this breakdown， service exports were worth USD 51.83 billion， up by 31.1%， while service imports were worth USD 58.52 billion， down by 12.5%. The dynamics in the service trade can be characterized as follows：

First， services exports grew by over 20% year-on-year. In the first two months of this year， Chinas service exports amounted to RMB 335.35 billion， up 21.9%， while service imports stood at RMB 378.63 billion， down 18.6%. Service exports increased by 40.5% more than service imports， narrowing the trade deficit in services by 77.2% to RMB 43.28 billion， down RMB 146.88 billion year-on-year. The fastest growing area in service exports was transport， which registered an increase of 93.9%.

Second， the proportion of trade in knowledge-intensive services increased. In the first two months this year， Chinas export of knowledge-intensive services registered RMB 324.16 billion， up 17.2% and accounting for 45.4% of Chinas total trade in services， marking an increase of 12.7%. The export of knowledge-intensive services registered RMB 182.61 billion， up by 14.7% and accounting for 54.5% of the total export of services. The export growth was faster in the fields of financial services and insurance services， as well as telecommunications， computers and information services， which were all up 48.4%， 39.6% and 30.2% respectively. The import of knowledge-intensive services registered RMB 141.54 billion， up 20.6% and accounting for 37.4% of the total service imports. Faster import growth was registered in the fields of financial services and telecommunications， computers and information services， which were up 57.3% and 32.2% respectively.

Third， the import and export of travel-related services fell sharply. The COVID-19 pandemic continued to exert a negative impact on trade in travel-related services. In the first two months of this year， Chinas imports and exports of travel-related services registered RMB 128.09 billion， down by 50%. The export of travel-related services fell by 54.1%， while the import of travel-related services fell by 49.6%. This was the main factor leading to the overall decline in trade in services this year. Excluding travel-related services， Chinas trade in services grew by 21.1% in the first two months of this year， among which exports grew by 29.1% and imports grew by 12.4%.

Foreign direct investment

From January to February 2021， the paid-in FDI in China was RMB 176.76 billion， a year-on-year increase of 31.5% （equivalent to USD 26.07 billion， a year-on-year increase of 34.2%； this excluded banking， securities and insurance， which were as noted below）.

In terms of industry， the paidin FDI for services was RMB 141.74 billion， up 48.7% year on year， and accounting for 80.2% of Chinas paid-in FDI. Among these， the paid-in FDI for wholesale and retail， accommodation and catering， and leasing and business services increased by 54.1%， 45.6% and 70.3% respectively.

In terms of origin， the paid-in FDI of BRI countries， ASEAN countries and the E.U. increased by 26.2%， 28.1% and 31.5% respectively （including investment via free ports）.

In terms of regional distribution， the FDI in eastern， central and western regions of China increased by 32.3%， 11.1% and 50.9% respectively.

Investment in fixed assets

From January to February， Chinas fixed asset investment （excluding rural households） was RMB 4，523.6 billion， a year-on-year increase of 35.0%. This was 3.5% higher than that recorded between January and February in 2019， with an average growth rate of 1.7% in two years. Among these， private investment in fixed assets accounted for RMB 2，618.3 billion， up 36.4% year on year. In terms of the month-on-month rate， investment in fixed assets （excluding rural households） increased by 2.43% in February.

By industry， the investment in primary industry totaled RMB 103.7 billion， up 61.3% year on year， while the investment in secondary industry totaled RMB 1，219 billion， up 34.1%. The investment in tertiary industry was RMB 3，200.9 billion， up by 34.6%.

Investment cooperation with countries along the Belt and Road

In January 2021， Chinese enterprises made non-financial direct investments worth RMB 10.88 billion in 49 countries along the Belt and Road region， down 1.1% （USD 1.68 billion， up 5.7%）， which accounted for 19.9% of the total amount over the same period， showing an increase of 0.8% over the previous year. These investments were mainly made in Singapore， Indonesia， Vietnam， the United Arab Emirates， Malaysia， Turkey， Laos， Kazakhstan， Thailand and Bangladesh.

In terms of foreign contract projects， Chinese enterprises signed 304 new contracts for contract projects in 57 countries along the Belt and Road region， with the newly signed contracts amounting to RMB 45.08 billion， which was down 29.4% （USD 6.96 billion， down 24.6%）， and which accounted for 46.6% of the newly signed contracts for foreign contract projects in China in the same period. The total contract amount was RMB 34.49 billion， up 34.1% （USD 5.17 billion， up 43.2%）， and accounted for 58.5% of the total amount in the same period.