Please be brave

„Later, I learned that my colleagues also got calls and were asked if they needed help setting targets. We said 'be bold' with a 'moderate to high' growth target for next year.

02:39

China's economy rebounds in third quarter, beating forecasts

China's economy rebounds in third quarter, beating forecasts

Exporters like Hong were not the only ones mobilized as Chinese leaders drummed up the country's economic powers to „bear greater responsibilities” in helping to stabilize the country's economic recovery and growth.

These powerhouses usually refer to Guangdong, Jiangsu, Zhejiang, Beijing City, Shanghai, Shandong and Fujian, each with a gross domestic product of more than 3 trillion yuan (US$421 billion) in the first three quarters of this year, representing 46 percent. In the national aggregate.

Also in tone setting Central Economic Work Conference Earlier this month, the world's leading exporter pledged to consolidate the fundamentals of its trade with the rest of the world.
Zhu Tian, ​​a professor at the China Europe International Business School in Shanghai, said „more responsibilities” for powerhouses should not detract from their growth. NationallyIt is widely expected to reset to 5 percent in 2024.

„It is not always counterproductive as far as development goals are concerned [being negotiated and assigned] realistic,” Zhu said. „Whether exporters will be 'freed up' to chase targets and if they are confident in investing is key.”

China's total foreign trade First 11 months 5.6 percent year-on-year decline to US$5.4 trillion in 2023. Net exports dragged 13 percent of gross domestic product (GDP) growth in the first three quarters, compared with a 29.8 percent contribution from investment and 83.2 percent from consumption.
But with exports rising in November – the first positive reading in half a year – China's export engine is expected to heat up in 2024, and prospects will improve. Expected interest rate cut A new rebalancing cycle by the US Federal Reserve and Western retailers.

A customs official in the coastal city of Ningbo told local media earlier this month that a recent survey of companies indicated a „recovery of confidence on the ground,” with more exporters citing an increase in orders.

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Sustained export growth 'in doubt': 5 ​​takeaways from China's trade data

Hong, who lives in Ningbo, said he expects more shipments to Walmart in the United States and Tesco in Britain next year to make up for some lost orders. His company's exports began to plateau in mid-2022, then fell 20 percent this year to US$7 million.

He was keen on the mention of „appropriate assistance” from local government as he was urged to be bold in his goal setting and strive to achieve those goals next year.

In fact, according to many exporters, one of the signature government policies is to match cash awards with new exports.

There could also be cash payments to encourage exporters to attend trade fairs, as well as a seed fund to tap Belt and Road countries, a key destination encouraged by Beijing to diversify away from developed markets.

As Beijing offers more destinations to Zhejiang, the province is heading to trade hubs like Ningbo.

Chi Jiayu

A high export growth target is crucial for Ningbo, which has vast manufacturing sectors and one of the world's largest container ports, to surpass 2 trillion yuan in GDP and enter the country's top 10 elite league.

The city's GDP is on track to reach 1.7 trillion yuan by 2023, ranking 12th nationally. That means if the target is set to end one year, it represents a nominal growth of 17.6 percent.

„It's like Beijing assigning more targets to Zhejiang, then sending the province to trade centers like Ningbo, and then accelerating the city to do more businesses in the coal-based export economy,” said Chi Qiaoyu, a deputy director. Ningbo Foreign Trade Services Center under the city's Bureau of Commerce.

Foreign trade is a pillar of the city's economy. Its export and import value rose 0.8 percent year-on-year to 1.17 trillion yuan in the first 11 months.

China's private companies are reeling from support measures that are 'merely lip service'

Private companies contributed more than 75 percent of the total, or 884.3 billion yuan, up 4.8 percent from the previous year. In terms of size, Ningbo has already overtaken the first-tier city Guangzhou to rank fifth among the top Chinese cities in foreign trade.

For places like Zhejiang, where Ningbo has jurisdiction, it needs to stimulate trade to drive growth. The province's trade dependency ratio — the ratio of trade to gross domestic product — was 60 percent last year, compared to Ningbo's figure of 80 percent. The national average was 34 percent.

Both Zhejiang and Ningbo, like other places across the country, will convene their annual People's Congress sessions early next year, in which they will announce economic targets for things like GDP growth.

Zhejiang Party Chairman Yi Lianhong this month presented a target of reaching 2 trillion yuan GDP or becoming a top 10 city, as provincial leaders discussed implementing pro-growth directives from the Central Economic Work Conference, a source said.

Workers in the province, well-known for its thriving private sector, have been told to „get down to the ground” and tap businesses to learn their needs. They are also trying to come up with new supportive policies.

Ningbo and other cities such as Taizhou and Yiwu have pledged support such as easier, cheaper loans, even as orders are expected to rebound next year, according to documents seen.

Alex Ma, an associate professor of public administration at Peking University, said fostering such positive interactions between local officials and companies could help improve the regional business environment.

But the province's business dynamics could suffer from such an allocation of growth targets, he noted, as businesses there are used to minimal interventions and Zhejiang workers generally „keep their noses out”.

'Can't find owner': Workers forced to take leave as Chinese firms struggle

„Entrepreneurs should be left to their own decisions,” he said.

Ma warned that some barriers to foreign trade are „structural or political” and cannot be tackled by local governments alone. Beijing's move.

Hong, after some back-and-forth phone calls, agreed to target 15-20 percent growth for 2024.

As foreign uncertainties and weakened ties to China continue to affect future prospects, there is still skepticism among private entrepreneurs about how much local governments can help with funding or policies.

Chen Yi, general manager of Ningbo Dijia VIDA Trading Co., said he is happy that the government will pay a larger share of his travel expenses as he attends trade fairs abroad.

14:45

An unwinnable conflict? US-China trade war, 5 years

An unwinnable conflict? US-China trade war, 5 years

In July 2022, long before China scrapped its zero-Covid policy, he was among a flight of lucky factory owners and business executives who received special permission to fly to Europe on China's first special plane chartered by the local government to meet foreign clients. At the end of last year.

But more than a year on, a turnaround has yet to come, and she finds that larger orders are harder and harder to come by.

„[Western buyers] They have found backup suppliers in Southeast Asia over the past three years [of China’s Covid control] And we're being asked to cut prices further because of a prolonged trade war or inflation in Europe,” he said.

The EU and the US are still Ningbo's two biggest destinations for exports, accounting for 35 percent of the city's total trade in 2022. But their share fell by 2.6 percentage points and 5.4 percentage points in the first three quarters of this year.

Ying Xiuzhen, general manager of China-Base Foreign Trade Co., Ltd., was quoted in a Ningbo media report as saying that most of China's supply chains are built to meet the needs of foreign trade, mainly with the United States and the European Union.

„If production and orders are shifted elsewhere, along with technologies and investments, the world's factory could repeat the fate of deserted American auto cities like Detroit,” he warned.

China-Base is one of the largest private export companies in Zhejiang, with many downstream micro-exporters and OEM (original equipment manufacturing) factories.

Justin Xu, owner of a lighting equipment company in another city in Zhejiang, has been experiencing sluggish sales since July 2022. His business' exports fell 30 percent this year, which he blamed on cut-off from the West and „engaged” competition.

No more wolf warriors and restore good relations with the US and Europe

Justin Sue

„The government is now telling us to export more next year and focus on Southeast Asia and the Middle East, but if we tap new markets easily, we would have already been there,” he said.

He added that it took time and money to adapt the design and manufacturing to the needs of Western customers in new markets.

When asked what the government should do to actually help, Xu said, „No more wolf warriors and restore good relations with the US and Europe so we can continue to trade with them.”

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