Since this year, China's foreign trade has continued to recover rapidly, with notable results. In the first half of the year, the total amount of both import and export of goods hit RMB18.1 trillion, up 27.1% year on year, with a two-year average growth of 10.8%. During this period, the vitality of market players was significantly enhanced. Specifically, the proportions of knowledge-intensive products, trade in services, exports from private enterprises and general trade all rose across the board. The distribution of domestic and international markets became more balanced. The leading role of those high-level open platforms became more obvious.

These achievements should be mainly attributed to the country's complete industrial categories and strong supply chain system, as well as its unremitting efforts to resolutely press ahead with the supply-side structural reform and open wider to the rest of the world. But at the same time, we should also see that there are still a number of disadvantages restricting the development of foreign trade in the country. For example, the high-end equipment manufacturing and productive services are lagging behind; the integration of IT application with industrialization is not deep enough; the enterprise innovation system is not yet complete; and both the self-sufficiency rate and the grade of some products are at a lower level. Especially, against the background that the cost advantage of primary factors has weakened, developed economies are generally seeking reindustrialization, and the growth rate of global demand has slowed down, the competition faced by China at both traditional and high-end industries becomes even more intense.   

The Fourteenth Five-Year Plan for Business Development explicitly proposed to intensify innovation in science and technology, institution, business form and model, push forward imports and exports, trade in goods and services, trade and two-way investment, and coordinated development of trade and industries, and enhance the overall competitiveness of foreign trade. Meanwhile, it rolled out a series of specific measures, including promoting the development of high-end and refined imports and exports, improving the digital level of trade, facilitating the construction of cross-border e-commerce comprehensive pilot zone and encouraging and guiding various business entities to build overseas warehouses, in an effort to accelerate the cultivation of more high-quality growth points in foreign trade.

At present, with the rapid development of big data, AI and other technologies, as well as their applications, the global economy has entered the process of digital transformation. The digital transformation of international trade and economy will result in the reshaping of factor resources, business entities, industrial systems and business models. The industrialization of information technology and the informatization of both traditional industries and consumption methods have obviously become the order of the day. All these mean that the factors affecting international trade and investment are changing dramatically.

Digital technology can help to compress the intermediate links of trade, reduce trade costs and barriers to entry, expand trade partners, and enhance trade efficiency. To a large extent, the grasp and application of digital technology will determine whether enterprises involved in foreign trade can timely upgrade their production, distribution and sales processes, build new digital business models, upgrade product structures, improve the quality of goods and services and ultimately sharpen their international competitiveness and abilities to adapt to digital economic and trade rules. The size of digital trade in the country has been at the forefront of the world. Digital technology is becoming an important tool for it to promote the transformation and upgrading of foreign trade and even create new growth points in this sector.

During the Fourteenth Five-Year Plan period, to foster more high-quality growth points of foreign trade, we need to further accelerate the construction of digital trade supporting facilities, including R&D of digital technology, digital services, etc., actively promote new technologies and platforms, continuously deepen the digital transformation of traditional industries under each department, and expand the breadth and depth of enterprise participation in the global value chain.  

More than that, we also need to improve the business climate for digital industry and trade development, give full scope to the role of enterprises as market players, speed up the pace of training digital trade talents, establish and improve digital trade rules and regulatory systems that adapt to the characteristics of various regions and industries and are in line with international standards, summarize and promote the innovative experiences in due course. As the global value chain triggered by digital technology is under reconstruction, we should pay attention to the gaps existing among various economies in terms of infrastructure access and quality, digital technology penetration and the possible impact thus produced on international economic and trade cooperation.    

It's advisable to take a longer view for a better understanding of the whole picture. During the Thirteenth Five-Year Plan period, China's foreign trade harvested a lot in spite of the complicated and tough situation. We believe that in the period of the Fourteenth Five-Year Pan, with the further development of the new round of technological and industrial revolution, China's foreign trade will burst with more amazing power and vitality.   

Source of WeChat Public Account:

Department of International Economics and Trade, School of Economics, Nankai University

Article from: www.people.com.cn