China’s foreign trade may drop 20 percent in Q2: analysts
Published: Apr 02, 2020 10:23 PM

Over 3,000 cars made by the SAIC Motor wait to be shipped overseas, including to the UK, Australia and Philippines, at a dock in the port of Lianyungang in East China's Jiangsu Province on Monday. Lianyungang has been expanding shipping lines to Australia, Southeast Asia and Europe this year, largely promoting vehicle exports. Photo: IC

Foreign trade companies in China are gradually returning to normal as more than 75 percent of China's major importers and exporters having recovered over 70 percent of their operational capacity, data released by the Ministry of Commerce (MOFCOM) revealed on Thursday. 

This should be a reassuring sign that Chinese trade companies are improving their performances, after the government and the businesses are scrambling to deal with the fallout from the coronavirus pandemic. 

As of March 30, 75.6 percent of China's major importer and exporters had recovered up to 70 percent of their previous operational capacity, up 4.2 percentage points from  the previous week, MOFCOM official Liu Changyu said at a routine press conference in Beijing. 

Activity in Central China's Hubei Province, which bore the brunt of the disease in the Chinese mainland, but where the outbreak is now put under control, still lags behind the rest of the nation, where about 50 percent of import/export firms had recovered  70 percent of operational capacity, Liu said.  

Liu Xuezhi, an economist at the Bank of Communications, said that many export-orientated firms will be dealing backlogs from unfulfilled orders when coronavirus peaked in China in middle February. 

"The good thing is, as manufacturing returns to normal, the risk of an industrial shift [overseas] is low," Liu told the Global Times. 

But, said Liu, there is an even bigger challenge ahead as China's exporters may run short of orders as coronavirus spreads globally, which might force some companies to shut down later. 

Some company representatives reached by the Global Times expressed similar concerns over dwindling orders. Duan Lianmin, chairman of a glass factory in Shenzhen, South China's Guangdong Province, told the Global Times on Thursday that her company's capital chain has improved, but is still strained due to the cancelation of orders from US and Europe. Her factory reopened in mid-March. 

The suspension of large trade fairs, important platforms for importers and exporters to access to potential clients, also exacerbate such woes, industry insiders said.

Xie Yuan, a manager of a Guangzhou-based shoemaker, told the Global Times that his company will have difficulties if foreign orders continue to plunge. His company manufacturers products for firms in Japan, Italy and Canada.  

"I planned to attend trade fairs in Indonesia and Shanghai, which were scheduled for March and April. But the events were postponed to the second half of 2020," Xie said. 

Liu anticipates that as coronavirus spreads across the globe, China's export volume might decline up to 20 percent in the second quarter year-on-year. China's dollar-denominated exports slumped by 17.2 percent in the first two months, customs data showed. 

"Judging by how the coronavirus evolved in China, the global pandemic is unlikely to turn a corner until the end of April or May, which means China's exports might rebound strongly in the third quarter," he said.

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