— This is the script of CNBC’s news report for China’s CCTV on July 13, 2018, Friday.
In terms of the trade trend after China joined WTO, let’s have a look over the wall behind me, which shows the monthly data of China imports and exports. In order to see the whole uptrend, we combined these 2 curves to make a comparison.
The data of export curve is greater than that of import curve in long term though, and because of seasoning factors and other overseas economy conditions, export data experienced more turbulence. However, basically, we can see these 2 curves shows a parallelism uptrend in long term.
In that month China formally joined WTO in 2001, Chinese export was US$24.503 billion; import was US$22.39 billion. But now, according to the latest data, export in May 2018 was US$ 212.87 billion while export was US$187.95 billion. The increase was 768.75% and 739.44 % higher than those of the month when China first joined the WTO, this increase within 17 years showing the contribution of China’s trade growth to the global economy.
Value Chain, this concept was introduced by Michael Porter in 1985. This concept was further extended to global industrial movement and re-set trend of manufacturing and production under international competition, and because of the promotion in manufacturing industry, Chinese position in global manufacturing value china also improves steadily.
According to Reuter’s data, in the rank about the ratio of the export value of participating in the global value chain to the total export value of the country, Luxembourg ranked first, with 70.8%, South Korea 62.1%, ranked sixth, Singapore 61.6%, ranked seventh, China ranked 34th, higher than the UK’s 47.6% and the United States’ 39.8%.
China is getting gradually upgrade on this list showing China plays an important role in global value chain, and similarly, global trade demand is also significant to Chinese economy.
And this chart also clearly demonstrates the close relationship between global trade and Chinese trade, the red line and blue line represent global imports and global exports, and yellow line represents Chinese imports. We can see that the relationship between Chinese trade and global trade shows an increasingly close and positive correlation trend
However, the challenge appears at the same time is economic protectionism in some European and American countries rise again after the financial crisis, causing recent trade dispute and friction. The International Monetary Fund President Lagarde told CNBC that the solution should be to promote and adjust trade, not to suppress trade.
“CLEARLY WHAT I’VE HEARD REPEATEDLY IS THAT THERE HAS TO BE IMPROVEMENTS AND CHANGES IN THE WAY TRADE IS CONDUCTED. AND THERE CERTAINLY ROOM TO BE EXPLORED FOR AN IMPROVEMENT OF THOSE TERMS AND CONDITIONS. delete ALL OF THOSE ISSUES SHOULD CERTAINLY BE EXPLORE AND DISCUSSED… AND A MORE… LEVEL PLAYING FIELD SHOULD FACILITATE TRADE RATHER THAN TARIFFS HURT TRADE.”
Global value chain activity has rebounded rapidly after the financial crisis, trade value that is related to value chain accounts for 70% of global trade. In 2017, the total value of Chinese trade contributed over 20% to global trade growth, and this data tells us that the upgrade in Chinese manufacturing industry will help China itself get continuous promotion in global manufacturing value chain, plus Chinese export-import demand and the growing trend in global trend will be related to each other more and more close.