China’s Commerce Ministry Warns of Non-Economic Factors Hindering Foreign Trade Growth

China’s Commerce Ministry expressed concern about non-economic factors impacting the country’s foreign trade, stating that it is facing an “extremely severe” situation in the second half of this year. The head of the ministry’s external trade department, Li Xingqian, mentioned that certain countries’ push for “decoupling,” “severing [supply] chains,” and “de-risking” are hindering normal commerce. China’s exports have been declining due to the global economic slowdown. Li also acknowledged the challenges posed by calls for supply chain diversification, as some companies claim that politicization of trade has forced them to relocate their orders and production. The ministry plans to assist businesses in dealing with unreasonable trade restrictions. However, there was no mention of China’s own export controls on key metals, which are set to take effect on August 1. The US has also implemented export controls to limit China’s advancements in high-end technology, leading to escalating trade tensions. Despite these challenges, China aims to attract and retain foreign investment, with prominent business leaders like Tim Cook from Apple and Elon Musk from Tesla visiting the country since it relaxed its border restrictions. The Commerce Ministry has been actively engaging with foreign companies and addressing operational challenges through regular roundtables and policy changes, including allowing foreign investors to increase their strategic investments in listed companies.

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