South China Morning Post:
According to the latest prediction of the World Trade Organization (WTO), global trade may shrink by as much as 32% this year. What is the estimate by the Ministry of Commerce on the trend of China's foreign trade this year? What might be the worst prediction? In addition, you just mentioned that many foreign trade enterprises have now seen their orders getting cancelled or delayed, and some enterprises have even been forced to cut pay and lay off employees. Will the Ministry of Commerce adopt some countries' practices of directly sending money to support foreign trade enterprises financially and help them survive the crisis? Thank you.
Ren Hongbin:
Thank you for your question. Since the beginning of this year, China's foreign trade enterprises have faced an extremely severe and complicated situation created by the pandemic. Different from domestic trade enterprises, foreign trade enterprises face challenges both in short and long term from home and abroad. Now, the main difficulties are reduced orders, rising costs, impeded international logistics, blocked industrial and supply chains, etc. From January to February, exports showed a double-digit decline, and foreign trade sector was facing an unprecedentedly severe situation.
With the improvement of domestic epidemic prevention and control, China's foreign trade enterprises have resumed production in an orderly manner. Up to now, the production capacity recovery rate has exceeded 70% in more than 76% of key foreign trade enterprises nationwide. In general, the production of foreign trade enterprises is back on normal track. But at the same time, we must consider that as the pandemic spread rapidly across the world, uncertainty created by the pandemic has become one of the biggest external uncertainties for the development of China's foreign trade. Now, more than 120 countries have adopted measures to restrict the flow of people and logistics, and many countries have entered a state of emergency, closing the borders of the countries and cities. All these measures have had a tremendous impact on the world economy and free flow of trade. Foreign trade development relies more on external demand. You just mentioned that the WTO report yesterday has shown that global trade may decrease by 13% to 32% this year. The range of the predicted decline is rarely seen in many years. All countries of the world are expected to suffer declines in economy and trade, which exacerbate each other and add to the difficulties China faces in foreign trade, especially in terms of external demand.
Some time ago, our foreign trade enterprises were concentrating their efforts on resuming production to ensure supply, but now they start to shift their focus from the supply side to the demand side. The insufficient external demand and increasing uncertain factors have brought more challenges and uncertainties to the development of China's foreign trade. According to our survey of key regions, industries and enterprises, currently foreign trade companies are facing many difficulties such as too many order cancellations and delays, more short-term orders and fewer long-term orders, as well as impeded international logistics, especially in terms of sea and air transportation, which needs to be further unblocked.
Meanwhile, although the situation is extremely severe, we must see that we are under the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, and enjoy the advantages of the socialist system with Chinese characteristics. And we have a strong industrial foundation established in the past 40 years of reform and opening-up, and the most complete industrial system in the world. The overall advantages provide a strong backing for the development of our foreign trade. At the same time, China's foreign trade sector has a strong resilience, sufficient potential and strong competitiveness, and its trend of long-term growth will not change. In particular, foreign trade enterprises have a strong sense of innovation and strong capability of expanding markets and responding to crises. Therefore, we have the confidence and capability to make notable achievements in the development of foreign trade through greater efforts.
In the next step, we will thoroughly implement the spirit of General Secretary Xi Jinping's important instructions. While fighting resolutely to win the battle against the epidemic, we will strengthen international cooperation on pandemic prevention and control, and take strong steps to ensure the implementation of a series of policies issued by the State Council, so as to help enterprises reduce their burdens. At the same time, we will carefully organize the third China International Import Expo, support enterprises to actively engage in foreign trade, and help them secure orders and maintain market shares. With redoubled efforts and more solid work, we will minimize the impact of the pandemic and do our best to stabilize foreign trade and investment. Thank you.
