Editor's note: Liu Chunsheng is an associate professor at the Beijing-based Central University of Finance and Economics. The article reflects the author's opinion, and not necessarily the views of CGTN.

According to data from the General Administration of Customs, China's total foreign trade in goods amounted to 20.1 trillion yuan in the first half of 2023 and saw a year-on-year growth of 2.1 percent. China's exports reached 11.46 trillion yuan, up by 3.7 percent, and imports fell by 0.1 percent year on year to 8.64 trillion yuan from January to June of 2023.

However, outbound shipments from China slumped 12.4 percent year on year in June, following a drop of 7.5 percent in May.

The weakening of external demand combined with the high basis impact of the same period last year, the year-on-year decline in the export value of most key commodities has widened compared to the previous month, but structural highlights still exist, with exports of automobiles and some new energy products maintaining a high growth rate.  As China's main export products, mechanical and electrical products export value in June decreased by 8.95 percent year on year, among which, the export of automobiles remained strong, with exports of automobiles and automotive parts achieving year-on-year growth of 109.93 percent and 5.11 percent respectively in June. Exports of new energy products, electric passenger cars, lithium batteries and solar cells, increased by 61.6 percent, increasing overall export growth by 1.8 percentage points.

In June 2023, China's exports to its major trading partners continued to decline to varying degrees. The year-on-year growth rate of China's exports to the United States recorded -23.7 percent. A decline in the outlook for U.S. manufacturing and high inventories have weakened external demand. China's exports to the EU dropped 12.9 percent year on year. The manufacturing PMI in the eurozone continued to decline in June, with a reading of only 43.4 percent, indicating an intensifying trend of contraction in the European manufacturing industry. On the premise that the logic of overseas recession remains unchanged, the manufacturing industries of major ASEAN member countries also face pressure from developed economies to fall back in external demand. In June, China's exports to ASEAN fell 16.9 percent, worse than in May. Since the beginning of this year, China's exports to Russia have become a major highlight, achieving a year-on-year growth rate of over 100 percent from March to May. In June, China's exports to Russia increased by 91 percent year on year, continuing to provide support for China's exports.

According to the IMF's World Economic Outlook in April, global economic growth will decline from 3.4 percent in 2022 to 2.8 percent in 2023. The slowdown in the growth of developed economies is expected to be particularly significant, dropping from 2.7 percent in 2022 to 1.3 percent in 2023. With the United States and Europe sliding towards recession, the outlook for global trade is bleak. The WTO is projecting merchandise trade volume growth of 1.7 percent in 2023, below the average of 2.6 percent for the 12 years since the trade collapse that followed the global financial crisis.

With the increasingly complex international situation and external environment, the global industrial chain is being reshaped by localization, regionalization and de-globalization. The United States is accelerating the "de-Sinicization" of supply chains, which restricts China's export growth. In recent years, the U.S. government has introduced multiple bills aimed at accelerating industrial backflow, and has also introduced industrial regionalization policies such as "nearshore outsourcing" and "friendly shore outsourcing". Affected by factors such as de-globalization, China-U.S. trade frictions, and rising domestic costs, China's labor-intensive industries are shifting to ASEAN countries, and trade substitution will bring certain pressure to China's exports.

Despite pressures, China's foreign trade resilience remains strong. In order to support high-quality development, China needs to continue optimizing and upgrading trade structure, and actively expand new trading partners to promote regional economic integration. In terms of trade policy, the Chinese government needs to deepen high-level opening-up, actively participate in international economic cooperation and competition, support enterprises to go overseas, participate in the global value chain, and enhance its own competitiveness. At the same time, China should strengthen cooperation with the Belt and Road, BRICS, RCEP and other countries, promote deep integration in infrastructure construction, industrial investment and other fields, actively participate in the reform of international economic governance, promote trade liberalization and facilitation, and maintain the multilateral trading system.