A night view of the Beijing CBD on Sept 9, 2018. (Photo/IC)
Stable expansion in January-May period despite global trade headwinds, friction
China will continue facilitating foreign investment and trade while stimulating consumption amid a complicated and slowing global economy, the Ministry of Commerce said on Tuesday.
The ministry reported stable growth in the country's foreign trade, foreign investment and consumption in the first five months of 2019 despite slowing global capital flows and uncertainty within the international business environment, adding that certain decisions by companies to move their industrial chains elsewhere was a natural market occurrence.
"The Sino-US trade dispute has brought a certain pressure on trade and investment, but it is under control," said Chu Shijia, head of the ministry's Comprehensive Department. "Over the past year we have seen foreign investment grow under the backdrop of shrinking global investment and stable trade volume. So far in 2019, the growth rate of trade and investment has accelerated," Chu said.
Foreign trade grew steadily from January to May. The total volume of traded goods reached 12.1 trillion yuan ($1.76 trillion), up 4.1 percent year-on-year, the ministry said.
During the first five months, high value-added exports such as integrated circuits rose 25.1 percent year-on-year, metal processing machine tools were up 25 percent, electric buses jumped 160 percent and wind power equipment surged 270 percent.
The government further liberalized the allowable scope of foreign investment on Sunday by shortening its negative lists, permitting more participation from foreign capital in areas such as agriculture, mining, manufacturing and services.
"The ministry is overhauling existing laws and regulations and amending laws inconsistent with foreign investment regulations in order to ensure the foreign investment law is implemented on January 1," said Tang Wenhong, head of the Commerce Ministry's Department of Foreign Investment Administration.
"China has further reduced restrictions on market access by foreign investors and now allows foreign investment throughout China in sectors where it was previously permitted only in pilot free trade zones," said Paul McKenzie, managing partner of Morrison & Foerster's Beijing office. "Strong headwinds will likely continue at least until the US-China trade relationship improves. Perhaps a more dramatic set of further amendments to the negative list will come out of the current trade talks," McKenzie said.
China's consumption was on firm footing. In the first five months, retail sales rose 8.1 percent year-on-year to 16.1 trillion yuan.
Companies from home and abroad have done well in recent months. For example, US sportswear company Nike reported 24 percent growth in China market revenue in fiscal year 2019. It was also the first time its annual revenue in China topped $6 billion.
Nike CEO Mark Parker said despite the trade dispute, "We are and remain a brand of China and for China", adding that the company has not seen any impact to date on its business from the tension.