NIAS Area Studies
PAKISTAN READER
Photo : CGTN
IN FOCUS
By Avishka Ashok
China's trade (Jan-Apr 2022): Four takeaways
On 9 May, the Global Times reported that China’s trade had sustained a growth of 7.9 per cent in the January-April period of 2022 despite the steadily increasing COVID-19 cases in the country. In this period, China’s trade was worth USD 1.93 trillion. The data revealed by the General Administration of Customs reported a 3.9 per cent growth in its exports in April on a yearly basis and amounted to USD 274 billion. However, the exports are at its lowest level since July 2020. The imports in April recorded no change and stood at USD 223 billion. Economic analysts from China primarily blamed the COVID-19 pandemic and the resulting lockdowns for the slow growth of the economy while also predicting a global impact because of the disruption of the supply chains.
China trade with Asia
First, China's trade with Asia helped sustain the economic growth.
China has retained the slow growth of its economy because of its rich trade relations with the Asian neighbours. As a part of Beijing’s ‘Friendly Neighbourhood’ policy, the country has managed to entangle the Asian economies with itself; thereby securing the inflow of essential resources and markets for its products. The countries benefitting from the Belt and Road Initiative also maintain steady economic ties with China and contributed to the Chinese economy in the first four months of 2022. While ASEAN remains to be the largest trading partner for China and accounts for 14.6 per cent of China’s total trade, economic activities with other Asian countries along the BRI route recorded a 15.4 per cent growth and was worth 3.97 trillion yuan in the January-April period. Trade with the Regional Comprehensive Economic Partnership members also recorded a 3.9 per cent increase and amounted to 3.84 trillion yuan.
Second, the EU and the US are the second and third largest trading partners, after ASEAN.
The European Union is the second largest trading partner for China while the US ranks third. Trade with the EU was valued at 1.73 trillion yuan in the January-April period and increased by 6.8 per cent on a yearly basis. The trade with the US recorded a 10.9 per cent increase and was worth USD 245.73 billion. The exports to the US grew 14.9 per cent and amounted USD 184.91 billion while the imports from the US slowed by 0.3 per cent and amounted USD 60.81 billion. The data revealed that the growth between the US and China had slowed substantially, compared to the last year.
Third, the war in Eastern Europe and the food restrictions have caused a depreciation in the value of exports.
The data also revealed that China’s grain exports had grown to 312,000 tons in April despite the bans and valued USD 150.1 million. The fertilizer export increased by 1.74 million tons on a monthly basis. In the January-April period, 916,000 tons of grains were exported by China. The data also revealed that despite the increase in grain export by 97.4 per cent since March 2022, the value of the exports was only 38.4 per cent higher and created a revenue of USD 150.1 billion yuan. China recorded an increase in the exports of canned food, meat, vegetables, edible fungi, dried fruits, nuts and fertilizer. Agricultural exports valued at 190.74 billion yuan.
Fourth, despite the reduced imports, the value of trade has remained high.
The government data revealed that China’s imports cost more in April on a yearly basis. Analysts hold the Ukraine-Russia conflict responsible for the price hike which has increased the cost of imports. Along with the war, the food restrictions and bans also caused obstacles for China. At present, 35 countries have imposed export restrictions. China’s energy imports have continued to grow in costs despite the decrease in import quantities. In the same period, there was a marked increase in price of coal, crude oil and natural gas. Crude oil imports were recorded at 171 million tons, less by 4.8 per cent while 75.4 million tons of coal was imported, also marking a decrease by 16.2 per cent. Nonetheless, the value of crude oil import increased 49.7 per cent year-on-year from 39.4 per cent in the first quarter and the import value of coal increased 78.6 per cent compared to the last year. A chief analyst of an energy industry explained the increased import values and said: “The decrease in the volume of energy imports was mainly due to surging prices because of the Russia-Ukraine conflict, which has stressed the global supply chain.”
The Chinese government foresees a continued hike in prices and have therefore taken steps to stabilize the domestic economy and reduce the shocks on the economy. The Ministry of Finance has removed import tariffs on coal from 1 May 2022 to 31 March 2023. The local and central governments also issued measures to increase the output of coal, explore domestic supplies potential, enforce medium or long-term contracts with coal providers and enhance the regulations on local prices. With the rising prices, the pressure on the government is building to transition to green and renewable energy sources.
References
“China's trade grows 7.9% in first four months amid COVID pressure,” Global Times, 09 May 2022
“China's exports grow 3.9% in April, lowest level since July 2020 amid sustained COVID pressure,” Global Times, 09 May 2022
“ASEAN remains China's No.1 trade partner from Jan to Apr, accounting for 14.6% of total trade,” Global Times, 09 May 2022
“China-US trade volume grows 10.9% in Jan-Apr,” Global Times, 09 May 2022
“China’s grain exports jump 97.4% in April amid bans by other countries,” Global Times, 09 May 2022
“Value of China’s energy imports surges amid geopolitical uncertainty,” Global Times, 09 May 2022
IN BRIEF
By Avishka Ashok and Arshiya Banu
INTERNAL
Energy: Crude oil and natural gas prices surge
On 9 May, The Strait Times reported that crude oil and natural gas prices have soared since Russia's invasion of Ukraine in late February, as sanctions against the world's largest energy supplier have forced several countries to seek alternative sources of fossil fuel. Sun Renjin, secretary-general of the China Petroleum Circulation Association's expert committee, predicted at a mid-April conference that if the war lasts longer than six months, oil prices will surpass the all-time high set during the global financial crisis in 2008. While China's overall energy security is not at risk, there may be long-term consequences. (“How the war in Ukraine is rattling China's energy transition,” The Strait Times, 09 May 2022)
WWII: Foreign Ministry spokesperson highlights lessons learnt from war victory
On 09 May, Chinese Foreign Ministry spokesperson Zhao Lijian called on the global community to work together to safeguard the outcomes of WWII triumph and to resolutely preserve the UN-led international order. In response to a question regarding Russia's Victory Day military parade, which was held at Moscow’s Red Square to mark the 77th anniversary of the Soviet Union's defeat of Nazi Germany in the Great Patriotic War, Zhao stated the World Anti-Fascist War victory was secured by the combined efforts of all peace-loving countries and people all over the world. He went on to say that one of the most important lessons learned from the win is that countries should be committed to mutual respect, peaceful coexistence, and finding common ground while retaining differences. (“China calls for global efforts to safeguard results of WWII victory,” CGTN, 09 May 2022)
Hong Kong: Spokesperson defends electoral system and the appointment of John Lee
On 9 May, the Hong Kong and Macao Affairs Office of China’s State Council spokesperson responded to the statements made by Western countries on the Hong Kong elections, the new electoral system and the central government’s policy for the city. The statement released by the spokesperson said: “The just-concluded election of the sixth-term chief executive of the HKSAR represents a new success of Hong Kong in developing democracy that is suitable to its own conditions.” The spokesperson reconfirmed that the winner of the elections had received the support of the general public in the city and that the accusations of the West would not distort the reality. (“Chinese spokesperson slams Western countries smearing Hong Kong election,” Xinhua Net, 10 May 2022)
Communist Youth League: President Xi attends 100th anniversary of CYLC
On 10 May, the Great Hall of the People in Beijing city celebrated the 100th anniversary of the founding of the Communist Youth League of China. President Xi Jinping attended the celebration and delivered a speech on the occasion. The speech focused on the Chinese dream of national rejuvenation. The First Secretary of the Secretariat of the Central Committee of the CYLC highlighted the need to uphold the CPC’s leadership and stay connected to the country and its people. The CYLC was also encouraged to strengthen political consciousness, become advanced and represent the Chinese people. (“China celebrates 100 years of the Communist Youth League,” CGTN, 10 May 2022)
INTERNATIONAL
Germany: Chinese President urges German Chancellor for efforts to prevent escalation of the Ukraine conflict
On 09 May, Chinese President Xi Jinping stated that all measures must be taken to prevent the Ukraine conflict from becoming an "unmanageable situation," in a video call with German Chancellor Olaf Scholz. He said: "All efforts must be made to avoid the intensification and expansion of the Ukraine conflict, which could lead to an unmanageable situation." Xi also asked Germany to join the Global Security Initiative, a broad and nebulous framework proposed by Xi last month that supports the principle of "indivisible security," which Russia has used to justify its invasion of Ukraine. (“China's Xi tells German Chancellor all efforts must be made to avoid Ukraine conflict from intensifying,” Reuters, 09 May 2022)
Environment: Foreign Minister calls for cooperation on drought and desertification
On 9 May, China’s Foreign Minister Wang Yi attended the leaders’ meeting on drought and sustainable land governance and urged the countries to enhance international cooperation on dealing with drought and desertification. Wang Yi observed that countries were faced with numerous challenges since the pandemic began in 2019. In such challenging situations, it is difficult to coordinate and manage development and environmental protection. Therefore, he suggested three solutions to the issue. He called for enhanced international cooperation, firm promotion of green development and improvement of the international rules. He said: “We should actively respond to the drought issues that African countries are concerned about, continuously develop and improve drought-control rules, and build a fair and reasonable desertification-control system.” (“China calls for global cooperation on fighting drought, desertification,” Xinhua Net, 10 May 2022)
Pakistan: Foreign Minister extends support to China’s Global Development Index
On 9 May, Pakistan’s Foreign Minister Bilawal Bhutto Zardari attended the virtual Group of Friends of the Global Development Initiative (GDI) meeting and expressed the country’s support and appreciation for the GDI. He called the initiative a useful platform for accelerating and coordinating efforts to implement the Sustainable Development Goals (SDGs). Zardari highlighted the possible digression in the goal to implement the SDGs due to the pandemic, climate change and geopolitical conflicts. He urged the meeting to sincerely address the challenges facing the developing world and extend help to “increase cooperation in public health and vaccine equity, ensure food security, enhance energy production, promote a global green economy, stimulate trade and industrialization, and eliminate the digital divide.” Zardari also pledged to strengthen Pakistan’s commitment to China’s BRI. (“China-proposed GDI platform to accelerate implementation of SDGs: Pakistani FM,” Xinhua Net, 10 May 2022)