Despite geopolitical tensions, expert still optimistic about growth

Despite potential challenges from evolving external conditions this year, foreign trade remains a critical component of China's development, an expert said, adding that a recent circular on boosting the development of border and cross-border economic cooperation zones will play a big role in optimizing the country's trade and economic structure.

Zhou Mi, a researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said that the release of the document, which calls for improving the layout and functions of the zones, is well-timed, given that China has relaxed its COVID-19 epidemic measures.

Because borders and ports were operating under containment measures over the past three years, their contribution to overall growth could not be fully leveraged.

"Therefore, I think the central government wants to take advantage of the current window after the relaxation of containment measures, not only to restore the previous border functions and cross-border economic cooperation zones, but also to explore new functions to grow and upgrade," he said. "Thanks to the new document, cooperation among border provinces, as well as cooperation at the national level with neighboring countries, can be further explored, creating a new driver for growth this year."

Since late last year, exports have been closely monitored as a key sector in determining recovery this year. Though export growth has waned somewhat since October and evolving geopolitical tensions may add to uncertainty, Zhou said that he remains optimistic.

"I think the role of foreign trade in catalyzing growth will still be sufficient this year," Zhou said. "Certainly, there have been new developments in foreign trade, and uncertainties remain across the globe. But China has maintained its comprehensive industrial and supply chains, while domestic demand is becoming more and more diverse. This means there is still plenty of room for foreign trade growth."

Before the new guideline was released, the Ministry of Commerce had already adopted a series of measures to spur border trade, including allowing the renminbi to be used as a settlement currency, and simplifying commodity export declarations.

The ministry has also enacted favorable policies to develop the wholesale, retail, agglomeration and distribution functions of border commodity trade markets and cultivate a number of business centers dedicated to specialized products from neighboring countries based on existing markets.

Zhou noted the specific emphasis on upgrading, innovating and improving supply and production chains in border and cross-border economic cooperation zones to turn them into world-class commercial platforms.

"China has been working to make trade and investment sustainable for a long time, and the resilience of its supply chain is also an important manifestation of sustainable trade," Zhou said. "Faced with a complex and evolving environment, it is even more necessary to strengthen this cross-border supply chain. Such resilience is not only critical to China's economic recovery per se, but also important to boosting other countries' confidence in trade relations with China."