Falling sea freight rates will also benefit Chinese exporters in 2023

An intelligent expressway monitoring system is displayed on screens made by Unilumin Group Co Ltd, a high-definition screen manufacturer based in Shenzhen, Guangdong province. (PHOTO PROVIDED TO CHINA DAILY)

Standing in a workshop in Hangzhou, Zhejiang province, Tian Chunlong, president of the commercial vehicle unit of BYD Auto Co Ltd, a Shenzhen, Guangdong province-based new-energy vehicle manufacturer, and his colleagues explained the details and "wow points" of electric buses to their Spanish clients in Alcorcon during an online product inspection link earlier this month. These 15 buses will be shipped to the European country in the first half of 2023.

Driven by much of the world's growing demand for new energy transportation products, Tian said the company's annual export growth rate of electric buses has stayed at around 50 percent on a yearly basis in recent years. It exported nearly 3,000 electric buses between January and October, including to the European Union, the Association of Southeast Asian Nations, Japan, India and Latin America.

About 1,250 kilometers from Hangzhou, Yang Jun, president of the international sales center at Unilumin Group Co Ltd, a Shenzhen-based high-definition screen manufacturer, said the company, after installing two 70-square-meter light-emitting diodes screens at Lusail Stadium, north of Doha for the FIFA World Cup Qatar 2022, is preparing to supply new LED screens for the 2023 AFC (Asian Football Confederation) Asian Cup, which will be held in Qatar later next year.

Even though China's export growth rate slowed in November due to a variety of factors such as softening overseas demand and geopolitical tensions, market watchers have expressed optimism over prospects for the country's trade sector in 2023, believing that its industrial upgrading and moves to optimize COVID-19 prevention measures will further facilitate domestic manufacturers to expand their market channels abroad, as well as help boost global economic recovery.

As the value of China's renminbi is likely to get stronger amid expectations of an economic rebound following the easing of epidemic control measures and many low-end manufacturing businesses will continue to move to Southeast Asian countries next year, China's foreign trade might still face some difficulties in the first half of 2023, said Bai Ming, deputy director of international market research at the Chinese Academy of International Trade and Economic Cooperation in Beijing.

"But established structural elements will sustain the growth of China's exports next year, as overseas demand for daily necessities, electronics and electric vehicles has notably soared in recent months," he said, adding that the one-year-old implementation of the Regional Comprehensive Economic Partnership pact will bring increments in foreign trade between China and other signatory countries, in particular ASEAN member states.

Workers load an export-bound BYD electric pickup truck into a containership berthed at a port in Shanghai on Dec 14. (SHEN CHUNTAN / FOR CHINA DAILY)

Moreover, falling sea freight rates will benefit Chinese exporters next year. This can be a practical driver to stimulate demand in the global market, said Chen Shuai, vice-president of Shanghai-based COSCO Shipping Holdings Co Ltd, a subsidiary of State-owned China COSCO Shipping Corp Ltd.

After decades of growth, the operation modes of a large number of Chinese companies have upgraded from original equipment manufacturers to businesses with strong innovation strength and modern management systems, said Wei Jianguo, vice-chairman of the China Center for International Economic Exchanges in Beijing.

Wei noted that some domestic companies have already taken a leading position in product innovation, design and production in industries such as electric vehicles and solar power generation, as well as offshore engineering equipment and telecommunications, reflecting China's comparative advantages are changing in the global market.

For instance, the export volume of China's new energy vehicles registered 100 percent growth year-on-year to 593,000 units during the January-November period of 2022, said the Beijing-based China Association of Automobile Manufacturers.

Since high energy costs in Europe have curbed the production capacity of energy-intensive industries such as chemicals and steel manufacturing, Chinese companies in these fields are expected to form export substitutions and grab more market share in global markets in the next stage, said Ding Rijia, a professor specializing in the energy economy at the China University of Mining and Technology in Beijing.

Compared with countries in Southeast Asia or other parts of the world, China has a complete supply chain support system. The country, backed by its capacity scale advantages, is capable of delivering goods within a short period and meeting overseas clients' demand for short-term replenishment of inventory, said Hong Junjie, vice-president of the University of International Business and Economics in Beijing.

Echoing that sentiment, Chen Bin, executive vice-president of the China Machinery Industry Federation in Beijing, said the Chinese market is able to greatly cut costs in innovation, logistics, market development and even raw material procurement for both domestic and global manufacturers. Its scale edge helps cut a crucial part of total manufacturing costs.

Eager to seize more market share from China's fast-growing trade in services, A.P. Moller-Maersk A/S, a Danish shipping and logistics services provider, announced last week that it will build its first green and smart flagship logistics center in China.

With a total investment of $174 million, the project, located in the Lingang Special Area of the China (Shanghai) Pilot Free Trade Zone, is expected to be operational in the third quarter of 2024.

"Shanghai plays a critical role in Maersk's global network. With Lingang's proximity to Yangshan port and its favorable free trade policies, this facility will provide agile and sustainable solutions, connecting and simplifying our customers' supply chains," said Caroline Wu, managing director of Maersk China.

China's foreign trade value rose 8.6 percent year-on-year to 38.34 trillion yuan ($5.5 trillion) during the January-November period this year, while foreign-funded companies in China saw their export value grow 2.4 percent year-on-year to 6.87 trillion yuan, said the General Administration of Customs.

Given the resilience and potential of the Chinese economy, the recent tone-setting Central Economic Work Conference called for stepping up the building of a modern industrial system, making breakthroughs in core technologies in key fields and improving the global competitiveness of China's traditional industries.

The meeting, which was held in Beijing on Dec 15 and 16, vowed that China will actively seek to join high-standard economic and trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Digital Economy Partnership Agreement.

"To reach these goals, China will further adhere to standard economic and trade rules, create a more market-oriented and law-based business environment, and open even wider to multinational corporations next year," said Zhao Ping, deputy head of the Academy of the China Council for the Promotion of International Trade.

"As there is fierce competition between the world's major economies over digital rules, if China joins DEPA, it will be able to bolster diversified, modular and adaptable digital rules that are more in line with the digital growth needs of developing countries, and small and medium-sized enterprises," she added.

With more provinces, such as Jiangsu, Zhejiang and Guangdong, enabling their export-oriented companies to secure more orders, Shu Jueting, a spokeswoman for the Ministry of Commerce, said the government will support domestic cities to use charter and commercial flight resources to assist executives and sales staff of export-oriented companies in participating in exhibitions, conduct business discussions, and take part in other activities abroad.

The official added that the government, in the meantime, will optimize service measures for inbound personnel, and provide more assistance to representatives of foreign companies to visit China to do business.

The Ministry of Commerce will work with various local governments and business associations to help companies take part in various exhibitions, consider the possibilities of restarting offline exhibitions, and continue to cultivate high-quality online exhibitions, Shu said during an online news conference last week.