Chinese President Xi Jinping encouraged export corporations, stating, "We must accelerate the construction of a strong trading nation." Export was the largest growth driver for China last year, but it is in an unavoidable situation of being hit due to the trade war with the United States. Experts within China are advising that fiscal policies must be fully mobilized, including urgently raising funds to support export corporations directly. This suggests a growing sense of crisis regarding exports in China.
The People's Daily, the official newspaper of the Communist Party of China, published an article on the front page of its April 14 edition titled, "Accelerating the fostering of new drivers of foreign trade." The media conveyed Xi Jinping's orders to "promote the optimization and upgrading of goods trade, innovate the service trade development mechanism, and accelerate the development of digital trade and the construction of a strong trading nation." It emphasized, "Currently, unilateralism and protectionism are deepening, and the uncertainties and instabilities in the external environment are increasing," adding that "Chinese foreign trade corporations should strive for continuous growth and qualitative improvement in foreign trade amid difficulties and challenges."
The People's Daily proposed three measures: ▲ exploring new markets and new spaces ▲ developing new management and new models ▲ creating new products and new advantages. First, in exploring new markets and spaces, it highlighted the 'Belt and Road Initiative' market, including Southeast Asia. The media stated, "The proportion of exports and imports of Belt and Road participating countries has exceeded half for the first time, and the growth rates of exports and imports with Latin America, Africa, five Central Asian countries, and Central and Eastern Europe are higher than the overall foreign trade growth rate," asserting that "in a complex and changing global economic situation, continuing to focus on emerging markets and demonstrating resilience and vitality is an important strategy for China's foreign trade growth."
Regarding the development of new management and new models, the focus is on stimulating e-commerce. The intention is to digitally transform offline stores to directly deliver all kinds of products to consumers worldwide. In creating new products and new advantages, it was noted that "the overseas exports of high-tech products such as electric vehicles, 3D printers, and industrial robots are accelerating," and that "more and more corporations are realizing innovation repeats through research and development (R&D), enjoying the benefits of increased foreign orders, and striving for larger market shares."
China's encouragement of foreign trade is interpreted as a response to concerns that export vitality may decline due to the ongoing trade war with the United States. According to the General Administration of Customs of China, in March, China's export amount was $313.9118 billion (approximately 448 trillion won), marking a 12.4% increase compared to the same period last year. While the upward trend remains, there are prevailing forecasts that it could significantly decline once the 145% tariff imposed by the United States begins to take full effect. Last year, China achieved a 5.0% gross domestic product (GDP) growth rate, with one-third of this coming from exports. Thus, a hit to exports would be fatal for China.
Internally in China, there are voices suggesting that it is necessary to stabilize the export front not only by relying on corporations' exploration of new markets and development of new products, but also through aggressive national-level support. In an interview with the economic media, Economic Research Institute Director Jia Kang noted, "Amid the escalating global tariff war initiated by the United States, foreign trade is facing issues such as rising supply chain expenses, shrinking market demand, and increased uncertainty regarding international regulations," and stated, "As fiscal policy is an important tool for national macro-adjustment, it must stabilize the fundamentals of foreign trade while promoting structural upgrades through precise policy decisions."
Director Jia stated, "We can consider supporting related corporations to maintain orders and stabilize production capacity through short-term fiscal policies," and elaborated that specific strategies include improving tax refund efficiency and implementing 'immediate refunds' for industries severely affected by tariffs to shorten capital turnover cycles. He also suggested raising emergency funds and providing low-interest loans for corporations that suddenly faced a drop in orders from the United States. Li Qiang, Premier of the China State Council, indicated on April 9 that they were prepared to respond to various uncertainties but has yet to announce specific policies.