Sustaining the sound fundamentals of foreign trade and developing fresh advantages in international economic cooperation and competition are important elements of promoting higher-standard opening-up and building new systems for a higher-standard open economy. In an article published in the Economic Daily, Professor Zhong Ninghua and doctoral student Meng Qingwei from Tongji SEM’s Department of Economics and Finance stressed that China can continue to build the positive momentum of foreign trade by bolstering region and country studies, fostering new growth drivers for foreign trade, and adhering to strict international economic and trade regulations. This will enable enterprises to expand their global market reach. The published original text is as follows.

In the first quarter of this year, China’s foreign trade recovered favorably. Looking ahead, China should consistently reinforce the positive momentum of foreign trade and create more favorable conditions for enterprises looking to expand their global market reach.

Sustaining the sound fundamentals of foreign trade and developing fresh advantages in international economic cooperation and competition are important elements of promoting higher-standard opening-up and building new systems for a higher-standard open economy. This year’s Report on the Work of the Government proposed to assist enterprises in expanding their global market reach, promote the development of cross-border e-commerce and other new business forms, adhere to strict international economic and trade regulations, and gradually increase the quantity and caliber of foreign trade.

Despite a challenging and complex backdrop, China’s foreign trade has shown a continuous recovery trend since 2023. Of particular note is the diversification of overseas markets. In terms of export destinations, in 2023, China’s exports totaled RMB 3.52 trillion to the U.S. and RMB 3.68 trillion to ASEAN, both at high levels; in terms of export products, the total exports of electric vehicles, lithium-ion batteries, and solar cells reached RMB 1.06 trillion, up 29.9%; in terms of export business forms, cross-border e-commerce exports reached RMB 1.83 trillion, up 19.6%. In the first quarter of this year, China’s foreign trade continued its positive recovery, with exports of goods rising 4.9%, reaching a new high for the same period. The unremitting effort of Chinese enterprises over the past years to diversify, specialize, and expand their export market is what lies behind these highlights.

“Diversify” is seen in how Chinese enterprises modify their export destinations; for four years running, China and ASEAN have been each other’s top trading partners. The development of the markets of developing countries has allowed China to continuously optimize the volume of its total foreign trade. “Specialize” is demonstrated by Chinese enterprises enhancing their competitiveness in global markets by means of cutting-edge business management models. Because of their robust supply chain management capabilities, some enterprises have completely capitalized on China’s large and diverse manufacturing sector, making cross-border e-commerce a new export growth avenue. “Internationalize” is demonstrated by the speed at which local Chinese companies are growing into global conglomerates. China’s outward foreign direct investment (OFDI) has been growing year by year across all industries, in which new energy enterprises accelerate the establishment of factories overseas, align with and adapt to the trade rules of developed countries, and increase the market share of high value-added products.

Looking ahead, China should continuously consolidate the positive recovery of foreign trade and create more favorable conditions for enterprises to expand their global market reach.

To improve its awareness of trade partners, China should expand its region and country studies, promptly publish related country trade guides, and explain to enterprises the various policy rules that each country has about trade and investment, commercial law, intellectual property protection, etc. China should extend its backing for major exhibitions such as the Canton Fair, China International Import Expo, and China International Consumer Products Expo, in order to foster relationships between export enterprises and global markets and expand sales channels for the products of micro, small and medium-sized enterprises. China should keep enacting policies that facilitate the issuance of visas for foreign traders visiting the country, expedite the smooth resumption of international passenger flights, and improve living conditions for foreign employees residing in China. China should encourage foreign executives and technical personnel to collaborate and share ideas with foreign trade enterprises, in order to make its products more internationally competitive and better able to react to foreign demand.

China should foster new drivers for the growth of foreign trade. China should further exert its all-round advantages in manufacturing through new business forms and models such as cross-border e-commerce. China should promote comprehensive reform in customs supervision of cross-border e-commerce and improve the facilitation of quick customs clearance for small parcels and low-value goods. China should assist enterprises in building warehouses overseas, expanding overseas sales channels, and fostering the growth of more internationally recognized Chinese brands. China should boost policy support for the “new three” products of its exports to maintain their technological supremacy, and accelerate the foreign trade development of technologies in health sciences, computer integrated manufacturing, etc. China should encourage the digital and intelligent transformation of the production processes of the “old three” products of its exports to improve the efficiency of production and supply chain management and raise the added value of labor-intensive export products. China should increase the amount of commerce with other countries, enhance the capacity of its enterprises to engage in the international division of labor, study and develop technical standards and product standards for intermediate imports and exports, and actively pursue international market access requirements.

China should abide by the strictest international economic and trade regulations. China should encourage enterprises to conduct overseas mergers and acquisitions and investments in building factories, and should also guide “go-global” enterprises to fully consider and comprehend the requirements of host countries and target markets in terms of labor protection, tax policies, rules of origin, etc. To lower the risks associated with foreign investment, Chinese enterprises should make the most of the bilateral economic and trade agreements signed by China. China should gradually and moderately liberalize market access and strive to introduce a group of foreign enterprises engaged in advanced manufacturing and modern services that can steer and drive the industry chain, in order to exert the “catfish effect” in the market and promote continuous quality upgrading of export products. China should encourage foreign-invested enterprises to re-invest in China, in addition to encouraging domestic enterprises to participate in or establish Sino-foreign joint ventures or cooperative enterprises to work together on technology research projects and create new forms of trade cooperation.