**Abstract**
The Great Wisdom ASDOCKS News Agency reported on April 23 that Huo Jianguo, president of the Ministry of Commerce, stated during an interview that the foreign trade data for the first quarter highlighted significant challenges facing China’s export sector this year. He emphasized that while the pressure on foreign trade growth is considerable, it is not a fundamental issue but rather a structural one, pointing to underlying problems in China's export competitiveness.
According to customs data, China’s total import and export value declined by 3.7% year-on-year in the first quarter, with exports dropping 1.6% and imports falling 1.2%. This marked a rare situation of declining both imports and exports. "This year's pressure is relatively high," Huo said, noting that last year's inflated trade figures created a higher base. Excluding Hong Kong and Taiwan, growth was likely below 4%, yet still weaker than previous years, indicating that structural issues are not just a temporary challenge.
Huo further explained that although the U.S., Europe, and Southeast Asian markets are showing signs of recovery, Chinese exports have not followed suit, which reflects weaknesses in the competitiveness of Chinese enterprises. He pointed out that processing trade is shrinking, and trade in eastern regions is also declining, creating what he called a “hard injury†that is difficult to adjust.
He added that many Chinese companies are preoccupied with managing various risks—such as exchange rate fluctuations—rather than focusing on market expansion. As a result, they are hesitant to secure long-term export contracts. Additionally, rising production costs have led to a sharp decline in manufacturing profits, prompting a faster shift of industries toward Southeast Asia compared to the central and western regions.
Despite government efforts to encourage industrial transfer to inland areas, Huo noted that these policies have not yielded significant results due to insufficient domestic support. He suggested that the Ministry of Commerce’s upcoming stable foreign trade policy will focus on developing new competitive advantages, exploring new markets, and increasing product value.
Regarding e-commerce exports and tax rebates, Huo mentioned that while service outsourcing largely relies on e-commerce, the mechanisms for tracking cross-border settlements and applying for export tax rebates are still under review.
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