Trade Drive to Boost China's Q2 Growth Rate

Premier Li Keqiang Orders Trade Support Including Export Tax Refunds Within 3 Business Days
State Council Implements Numerous Trade Support Measures While Maintaining Zero-COVID Policy

[Asia Economy Beijing=Special Correspondent Jo Young-shin] China has taken steps to revitalize foreign trade, including expediting the execution of export tax rebates. This move comes as domestic demand has significantly deteriorated due to the 'Zero (0) COVID' policy in major cities such as Shanghai, prompting a push to boost trade.

Photo by Xinhua News Agency Capture

According to Chinese media including the official Xinhua News Agency and People's Daily on the 9th, Premier Li Keqiang chaired a State Council meeting the previous day, emphasizing that opening up to the outside world is a fundamental national policy of China. He instructed that policies introduced to stabilize trade and foreign investment be implemented promptly.

Premier Li urged timely resolution of difficulties faced by foreign-invested enterprises in investment, production, and logistics, stressing the need to stabilize foreign trade and foreign investment. He also emphasized activating foreign trade by processing export tax rebates for outstanding foreign-invested enterprises within three business days.

He further ordered ensuring smooth logistics to facilitate customs procedures such as shipping and unloading, and preparing measures to gradually reduce port-related costs. Premier Li added that improving the business environment through tax benefits and other means is necessary to raise the expectations of foreign-invested enterprises.

The State Council stated that although downward pressure on the economy remains significant, economic growth and epidemic prevention and control must be harmonized. It reaffirmed the existing stance of maintaining the Zero COVID policy while driving growth.

Immediately after the State Council meeting, China’s Ministry of Commerce announced it would protect production, logistics, and employment to stabilize foreign trade. It also added that financial benefits for trade-related enterprises would be supported. The trade reinforcement measures are interpreted as a determination to expand trade in June, the last month of the second quarter, to maximize the economic growth rate.

Zhou Yu, Director of the International Department of the People’s Bank of China, emphasized, "The People’s Bank will further strengthen policy support for trade enterprises by lowering corporate financing costs, expanding foreign currency loans and exchange rate hedge support, waiving fees for foreign exchange derivative transactions, and extending loan principal and interest repayments to stabilize foreign trade."

Chinese media express optimism that China’s foreign trade will soon rebound. Global Times reported that since the epidemic in major cities such as Shanghai and Beijing is under control, China’s trade will normalize.

Hu Qimu, a researcher at the Synosteel Economic Research Institute, said, "Major companies have resumed operations, and logistics are normalizing," expressing optimism that "China’s position in the global industry will not change."

Tian Yun, former Vice President of the Beijing Economic Operation Association, stated, "Even if China’s trade growth rate does not increase significantly this year, China’s trade volume will still be the world’s number one."

However, concerns remain that China’s second-quarter growth rate will deteriorate significantly. Chen Jia, a researcher at the International Monetary Institute of Renmin University, forecasted, "China’s trade growth scale and momentum will decline sharply in the second quarter." He pointed out that lockdowns due to the resurgence of COVID-19, Russia’s invasion of Ukraine, and the international grain and energy crises will worsen China’s foreign trade.

This content was produced with the assistance of AI translation services.