In July of this year，China unveiled its policy outline for the stable development of foreign trade. Given the major changes taking place at home and abroad，how can the nation's foreign trade make needed adjustments while maintaining a stable performance with good momentum for growth?

At present，China's foreign trade environment is extremely complex and subject to abrupt changes. Since the outbreak of the global financial crisis in 2008，the growth rate of China's foreign trade has continued to slow，slipping below the double-digit levels of the previous two decades. In 2009，the total import and export volume actually showed negative growth for the first time. In 2010 and 2011，growth recovered though from a low base of comparison. Between 2012 and 2014，trade growth was less than expected and in 2015 and 2016，growth turned negative once again. Since 2017，there has been good growth momentum，but this rebound needs to be consolidated.

The role of foreign trade in China's economic growth has been weakening. In 2009，for the first time，trade income elasticity showed a negative value of -1.95. Exports were a drag on economic growth. Trade income elasticity recovered in 2010 and 2011，with readings of 2.88 and 1.60，respectively. However，since 2012，export growth has lagged behind growth in gross domestic product. In 2015 and in 2016 there was negative growth in trade income elasticity of -0.28. Although foreign trade has resumed growth since 2017，it has had a limited effect on economic growth. In the first half of 2018，net exports contributed a negative -0.7% to GDP growth. In short，the pace of foreign trade growth has fallen much faster than expected. This is an important factor in China's economy entering a new normal of downward pressure.

Five Factors