China is still struggling to recover its foreign trade, facing both international and domestic difficulties. China’s trade numbers were bad in the first months of this year but there are hopes for improvement in the coming months.

China’s foreign trade is going through hard times. Experts blame various factors. Professor Xia Nanxin from Lingnan college of Sun Yat-sen University, said, “The exports are affected by sluggish demand in the US and Europe. Also Chinese products are losing their comparative price advantage due to rising domestic manufacturing costs.”

One possible piece of good news is that Chinese imports contracted at their slowest pace since 2014.

“The import figures show the large investments in housing and infrastructure are succeeding in stabilizing domestic demand. But the sluggish international commodity prices still greatly affect China’s imports,” said Xia.

Ge Yunfei from Guangzhou said, “Apart from flagging commodity prices, China’s economy also faces a global rise in trade protectionism. A WTO report says G20 economies rolled out five protectionist trade measures every week from October last year to May. That’s the fastest pace since the 2008 financial crisis.”

China’s Guangdong province accounts for a quarter of the country’s trade volume. Any fluctuation in international trade can be easily felt here. Li Tianzhi runs a consulting firm here providing services for companies going overseas.

Li, managing director of Hitouch Consulting in Guangzhou, said, “Many of them are worried about the situation. The products made-in-China are getting more and more expensive. And they’re losing international clients and orders.”

The second half of this year is expected to be better.

Li said, “The situation will be better than the first half of the year, because the high season of foreign trade is in the latter half of the year. The situation will also partially depends on the Chinese government, such as how to value RMB, and how to control salary increase, etc.”

Li said that in recent years, most of his old clients’ companies have struggled to survive, and not all of them have succeeded. But the pressure is also forcing many more to transform and upgrade.