The Epidemic Will Affect Import And Export Trade, But The Trend Of Continuous Growth Remains Unchanged

- Apr 14, 2020-

The epidemic will affect import and export trade, but the trend of continuous growth remains unchanged

In terms of import and export, the overall positive trend will not change. According to the data of the General Administration of customs, the total value of China's foreign trade import and export in 2019 reached 31.54 trillion yuan, an increase of 3.4%, showing a quarterly rise.

In the first quarter, the total import and export value was 7.03 trillion yuan; in the second quarter, 7.68 trillion yuan; in the third quarter, 8.26 trillion yuan; in the fourth quarter, 8.59 trillion yuan.

The epidemic has led to the extension of the shutdown time of most export enterprises after the Spring Festival, and the decline of import and export trade.

However, Guangdong, Zhejiang, Jiangsu, Shanghai, Shandong and other provinces with large export volume are generally not affected by the epidemic, so they will not affect China's export scale in a large area. On the import side, on the basis of the growth in recent years, there will be a substantial increase.

The epidemic will reduce the output value of the manufacturing industry, but the overall advantage of the manufacturing industry is still

In the first quarter, the output value of the manufacturing industry will be greatly affected. Because the manufacturing factories did not expect the development of the epidemic situation when they had a holiday years ago, the manufacturing industry will be affected except for the vast majority of medical supplies and people's daily necessities. Although medical supplies have increased substantially, they account for a relatively small proportion of the output value of the manufacturing industry.

Therefore, only when manufacturing industry returns to production on a large scale can new growth occur, which ultimately depends on whether the epidemic is under control.

In my opinion, the output value of manufacturing industry in the first quarter may fall by more than 30%, but if the epidemic is controlled soon, the manufacturing industry will be generally better. Because the overall advantages of China's manufacturing industry have not disappeared. The manufacturing system is the most complete in the world. The industrial chain, supply chain, service chain and value chain are the most complete. Most of the manufacturing industry clusters are still in China. Accelerating the transformation and upgrading of manufacturing industry has become a common behavior and a major trend of high-quality and sustainable development of manufacturing industry.

Although U.S. Commerce Secretary rose advocates that China's epidemic will bring jobs and manufacturing back to the United States, it is not only his wishful thinking, but also impossible to achieve in the short term. The transfer of industrial chain, supply chain and service chain is expensive, and the transfer will not be so fast. The whole service supporting capacity formed around the industrial chain, as well as the upstream and downstream relationships, are formed after decades of cross-border market seeking for supply and demand, and the market mechanism playing a role. It is difficult to achieve it overnight according to the wishes of politicians.

So if the epidemic is contained soon, investors will not be so foolish to move manufacturing out of China regardless of cost. It does not exclude that some enterprises are transferring to the United States under the pressure of the United States, or some enterprises are transferring to neighboring countries driven by the rising cost of China's manufacturing industry since 2008, but these are not related to the epidemic, nor will they change the integrated advantages of China's manufacturing industry.

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