China’s 2016 Foreign Trade Decreases 0.9%


China’s foreign trade of goods totaled RMB24.33 trillion in 2016, decreasing 0.9% from a year earlier, according to data from the General Administration of Customs of China (GAC). Of that, exports fell 2% YoY to RMB13.84 trillion, while imports rose 0.6% YoY to RMB10.49 trillion. Trade surplus was RMB3.35 trillion, a year-on-year shrink of 9.1%.
The foreign trade represented increasingly better quarterly in 2016, especially for the fourth quarter (Q4). Foreign trade, exports and imports all fell in Q1, declining 8.2% YoY, 7.9% YoY and 8.6% YoY, respectively. In spite of continuous decreases in Q2, things got much better: decreases shrank to 1.1%, 0.8% and 1.5%, respectively. In Q3, foreign trade saw an increase of 0.8% YoY, imports rose 2.3% YoY, and exports fell slightly 0.3% YoY. In contrast in Q4 there were three positive growths for foreign trade, exports and imports, reaching 3.8%, 0.3% and 8.7%.
By trade models, China’s general trade for 2016 was up 0.9% YoY to RMB13.39 trillion, accounting for 55% of the nation’s total foreign trade. The proportion was one percentage point greater than in 2015, optimizing the trade model structure.
In 2016, China’s exports to Russia rose 14.1% YoY, followed by Poland (11.8%), Pakistan (11%), Bangladesh (9%) and India (6.5%). In the same period, the nation’s exports to the EU boosted 1.2% YoY, that to the U.S. grew 0.1% YoY, while that to the ASEAN declined 2% YoY, with combined exports of the three destinations making up 46.7% of China’s total exports.
Foreign trade by private enterprises improved 2.2% YoY to RMB9.28 trillion in 2016, occupying 38.1% of the nation’s total foreign trade. In breakdown, exports fell 0.2% YoY to RMB6.35 trillion, holding the highest proportion in China’s total exports continually, reaching 45.9%. Imports increased 8.1% YoY.
Electromechanical and traditional labor-intensive products remained as major varieties of exports in 2016. Exports of electromechanical products decreased 1.9% YoY to RMB7.98 trillion, contributing 57.7% to China’s total exports. Of that, exports of medical equipment boosted 6.1% YoY, and that of storage batteries went up 4% YoY. Also in 2016, exports of traditional labor-intensive products fell 1.7% YoY to RMB2.88 trillion, accounting for 20.8% of the nation’s total exports. More specifically, enterprises engaged in textiles, toys or plastic products all saw export growth.
Import volume of bulk commodities like iron ore, crude oil and copper kept growing, but prices of main imported commodities remained low with decreases contracting. In 2016, China imported 1.02 billion tons of iron ore (up 7.5% YoY), 381 million tons of crude oil (up 13.6% YoY), 256 million tons of coal (up 25.2% YoY), 13.21 million tons of steel (up 3.4% YoY), 4.95 million tons of copper (up 2.9% YoY) and 27.84 million tons of oil products (down 6.5% YoY). Import prices declined, in general, down 2.1% YoY. To be specific, average import prices of iron ore fell 0.5% YoY; that of crude oil decreased 18.6% YoY; that of oil products declined 10.8% YoY; that of coal lost 0.1% YoY; that of copper shrank 6% YoY; and that of steel went down 5.5% YoY.
In Q4 2016, China’s Export Leading Indicator has increased for three consecutive months, reaching 37.4 in December, up 0.5 points MoM. This may alleviate pressure on exports in Q1 2017. In December, Purchase Management Index for export trade was down 0.6 points MoM to 39.4, while new export order index grew 0.6 points MoM to 41.9, according to the network questionnaire survey. Furthermore, Manager Confidence Index declined two points MoM to 43.5. Comprehensive cost index reached 23.9, falling 1.6 points MoM.
Difficulties still exists in 2017 as foreign trade in 2016 by foreign-funded enterprises went down 2.2% YoY and by state-owned companies fell 5.6% YoY respectively, and foreign trade that processing trade generated declined 4.9% YoY.