Will 'Altesh' Offensive Intensify... Chinese Premier Li Chang Says "Lower Logistics Costs"

Li Chang, Premier of the State Council of China, has issued instructions to further reduce logistics costs to enhance the export competitiveness of Chinese products. This is seen as an effort by China, facing economic headwinds, to seek a breakthrough through exports.

According to the South China Morning Post (SCMP) in Hong Kong on the 12th, Premier Li held a State Council meeting the previous day and stated that measures to lower logistics costs should be sought to strengthen domestic consumption and export competitiveness. Premier Li emphasized, "Efforts are needed to optimize freight transportation and promote the digitalization and smartization of the logistics sector to significantly reduce logistics costs."

[Image source=Reuters Yonhap News]

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According to the China Logistics Information Center, the total social logistics cost as a percentage of Gross Domestic Product (GDP) was 14.4% last year, down 0.3 percentage points from the previous year. In contrast, the logistics cost per unit of GDP in the United States reached a record high of 9.1% in 2022. India, with a level between 14% and 18%, has declared its intention to reduce this to 8% by 2030.

China is focusing more on exports amid concerns over worsening economic growth due to the ongoing real estate slump and weak consumption. According to the General Administration of Customs, China's export value in April was $292.5 billion (approximately 401.1637 trillion KRW), marking a 1.5% increase compared to the same period last year (in dollar terms), recovering from the previous month's (-7.5%) negative shock. The yuan has also depreciated by 2.1% against the dollar this year, creating favorable conditions for exports.

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However, SCMP noted that if external tariff attacks on key strategic products such as electric vehicles intensify, this improving trend could be disrupted. The EU is considering raising tariffs on Chinese electric vehicles, and the United States is expected to announce as early as next week plans to impose tariffs on key strategic sectors including electric vehicles.

Although specific details related to this State Council meeting have not been disclosed, China is expected to promote efficiency improvements in railways and ports. SCMP explained, "Reducing logistics and transportation costs can also help create a larger domestic market and protect the economy from geopolitical issues."

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