In recent years, through the “Belt and Road” strategy and the China-Japan-South Korea Free Trade Area, China has been actively strengthening the integration of regional economic development, seeking new growth points for foreign trade and driving domestic economic development.

With the expiration of the “non-market economy status” clause on December 11, 2016, China automatically became a market economy country, while Trump signed the withdrawal from the Trans-Pacific Partnership Agreement, China is facing new opportunities and challenges in the changing international environment. Now we analyze China’s international trade environment through three aspects: China’s external environment, domestic industry status and international trade agreements, and give countermeasures to cope with the current trade situation from two aspects: upgrading domestic industry and building finance to improve the external environment.

Analysis of the current situation of China’s trade

The lack of international trade growth points, low demand, green trade barriers restrictions. Data show that from 2014 to 2016, the volume of world trade in goods has slowed down along with the world economy in successive years, and the growth rate of the world economy has dropped from 3.4% to 3.1%, and the volume of world trade in goods has also dropped from 2.8% to 1.7%.

Since the conclusion of the Uruguay Round of negotiations in 1994, the WTO was established, and tariff barriers and non-tariff barriers were strictly regulated and restricted in the agreement, so that trade was conducted in a more transparent environment, the power of trade protectionism was weakened; however, under the economic depression, various countries took advantage of the importance and urgency of strengthening environmental protection in order to protect local industries and employment rates. In order to protect local industries and employment, some countries took advantage of people’s awareness of the importance and urgency of environmental protection and exaggerated the safety hazards and pollution defects of imported products and imposed large-scale restrictions. The international economic situation has officially entered the stage of regionalized protection policies after the UK’s withdrawal from the EU, as evidenced by Trump’s claim to have withdrawn from the TPP to protect local industries. The current economic situation is somewhat similar to that before World War II, and within the next 30 years, it is bound to be the culmination of the disintegration of various trade agreements and the gradual rise of anti-globalization forces. After the financial crisis, developed countries realized the danger of over-reliance on the virtual economy and the importance of the real economy, and put forward the slogan of reviving the manufacturing industry and accelerating “re-industrialization” to return to the real economy. The re-industrialization strategy of developed countries has squeezed China’s share of international trade.

The domestic industrial structure is out of balance and some of the competitive advantages of international trade are lost. China relies on labor, land and other primary factors of comparative advantage, in the context of global value chain division of labor processing trade into the international division of labor system, to achieve sustained rapid economic growth. At the same time the industry is in the low value-added segment of China’s processing trade industry, this high energy consumption, high pollution as the cost of development is not sustainable.

In participating in the international division of labor, it faces the problem that the comparative advantage of primary factors is gradually weakening, and the comparative advantage of high-end factors such as high-end human capital and independent R&D capability has not yet been formed. According to the relevant data, the structure of China’s working population is changing and the population dependency ratio is increasing. Tian Wei et al. argued through the gravitational equation that the population dependency ratio is an important driving force for the growth of bilateral trade, and in the face of the aging population, China will face the disappearance of the demographic dividend next.

The competitive advantage of cheap labor will be gone, and the low value-added industrial products will no longer be sufficient to recover the high cost of land rental, energy consumption, and labor expenses.

With the WTO as the basic framework of multilateral trade rules, the rapid development of China’s foreign trade has contributed to the fragmentation of the international trade pattern. Since China’s accession to the WTO, total imports of goods have expanded approximately five-fold, with an annual growth rate of nearly 20%, driving domestic economic development.

However, with the increase in trade member countries and the deepening of trade activities, multilateral trade has revealed some drawbacks. Due to the large number of low-technology finished products hitting foreign markets, China has been the subject of the most anti-dumping and antitrust prosecutions under the pretext of green trade barriers.

With automatic “market economy” status from December 11, 2016, anti-dumping incidents will be significantly reduced. As the highest-ranking regional organization in the Asia-Pacific region, APEC is an agenda-driven forum rather than a fully structured organization, a diplomatic consultative platform rather than a mandatory contractual organization, which is less enforceable than the WTO, leading to its gradual degeneration into a shell structure lacking political and public support. When facing more and more litigation and friction caused by the spaghetti-bowl-like multilateral trade rules, China began to seek growth in bilateral and regional trade.

Suggestions for coping with the current trade environment

After China entered the new normal, the economic growth mode with capital investment and high resource consumption will not be sustainable. Considering our economic situation and the international trade environment, we should accelerate the pace of industrial structure upgrading and build a new industrial system in order to improve the international trade competitiveness of our industry.

With the advantage of China’s macroeconomic control and regulation, the government plans to encourage the development of high-quality industries through industrial planning and regional industrial policies to effectively guide the development of quality industries, restrict industries that are not conducive to the optimization and upgrading of industrial structure, clearly encourage innovation and technological progress, through technological innovation and technology diffusion, reconfigure the industrial key techniques, improve the quality of industry and resource allocation efficiency, give a strong policy signal to business, so as to drive the entire Optimization and upgrading of industrial structure.

At the same time, in order to accelerate technological progress, foreign-funded enterprises are actively introduced to drive the upgrading of industrial structure through technological spillover. Seeking new growth points in terms of cultural industry development and export can be actively pursued. China has a long history and strong cultural deposits, with the help of these intangible assets, increase the investment in cultural industry, actively develop film and animation and other exports, and strive to build an influential international famous cultural brand, make full use of the national construction of the Shanghai Free Trade Zone to enhance the status of “national foreign cultural trade base”. We will take advantage of the opportunity of building the Shanghai Free Trade Zone to enhance the status of “national cultural trade base” and form a good leading role, so as to change the situation that the proportion of cultural trade in the foreign trade structure is decreasing.

Laying out a strong financial strategy to enhance international competitiveness and improve the external trade environment. Although China ranks second in GDP, a large economic power is not the same as a strong economic power. A strong economy requires not only a sufficient economic scale and high per capita income, but also an open and effective financial system that can allocate resources globally and spread risks.

Considering China’s current indirect financing method, which is mainly bank financing, we can choose the financial expansion path of banks going global. The financial institutions that go global are positioned to support the globalization of currency, globalization of financial business, globalization of financial transactions, enhancement of profitability, anti-risk capacity, deep integration of the incoming market and the Chinese market, and improvement of international discourse [2. The enhancement of financial capacity will not only improve China’s international trade influence, but also serve the country’s international strategic layout. When Trump withdraws from the TPP and returns to the local layout, China should actively enter the overseas market, and lay out the global network layout by means of self-establishment, mergers and acquisitions, agency bank cooperation, etc., to provide a strong guarantee for the development of international trade.

Conclusion

In the face of the current complex international trade environment and domestic industrial defects, we should accelerate the process of industrial upgrading, seek breakthrough points in the direction of culture?a industry exports, change our economic situation and policy direction; at the same time, strengthen the financial layout, with strong financial for international trade growth to provide momentum.

Analysis of the current situation of China’s international trade and its response

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