The recent tightening of epidemic prevention and control has caused supply chain disruptions in some parts of China and affected the efficiency of foreign trade export. Can China's foreign trade continue to grow?In an exclusive interview with YICAI, Wei Jianguo, former Vice Minister of the Ministry of Commerce and Deputy Secretary-General of China Center for International Economic Exchanges, said that China's foreign trade industry this year faces no smaller challenges than last year. As epidemic prevention and control work in the country ramps up, the main challenge facing foreign trade has shifted from external circulation to internal circulation. "\\;Hampered internal circulation will lead to greater logistics difficulties and more blocking points"\\;.In the view of Wei Jianguo, while the year 2022 may not have gotten a good start, the impact will nevertheless be short-lived. Moreover, the situation varies from region to region, and regional complementarities do exist. Despite the adverse impact, China’s foreign trade will continue to maintain double-digit growth in the first and second quarters and the whole year.Foreign trade orders are ample, but there are "\\;three shortages"\\;Wei Jianguo believes that as epidemic prevention and control tightens in China, foreign trade as a whole will show three characteristics.First, information from various local commerce departments shows that one third of China’s foreign trade enterprises actually receive more orders, another one third see their orders going flat, and only the remaining one third have declining orders. The decline is mainly due to the slower recovery of production capacities in Southeast Asia, including Vietnam, Malaysia, and Indonesia.Second, the foreign trade industry now faces the problem of "\\;three shortages"\\;, namely shortage of containers, shortage of manpower, and shortage of funds. Among them, there is a shortage of containers in sea, land, air, and railway transport. China Railway Express to Europe, which had been supplementing some transportation capacity, also faces delivery difficulties due to the Russia-Ukraine conflict. The reason for the manpower shortage is that workers cannot go to work due to upgraded epidemic prevention and control measures in some areas. Enterprises’ capital turnover has also slowed down significantly as a result of the affected supply chains. For this reason, the government needs to provide relief policies for enterprises to alleviate their financial pressure.Third, an overall regional imbalance has emerged. Regions with good epidemic prevention and control have a better foreign trade situation, while those regions seriously affected by the COVID-19 pandemic face serious difficulties. To Wei Jianguo, global demand remains strong. This year, overseas orders will continue to increase. Affected by an international energy crisis and the rise in raw material prices caused by the pandemic and the Russia-Ukraine conflict, factories in many leading manufacturing countries, including Germany and France, have to stop production, which strikes a considerable blow to the supply chains in Europe. It may well send the EU's economy to negative growth. This has led to a big surge in demand for Chinese textiles, household appliances, and daily necessities in overseas markets, especially in Europe. It is also one reason why one-third of China’s foreign trade enterprises have received growing orders. Taking textile manufacturers as an example: the current challenge lies in the fact that raw materials cannot be brought in, while the finished products cannot go out. Fortunately, the June-September period is traditionally the peak season for China’s foreign trade. &\\;nbsp\\;Chinese foreign trade is expected to continue double-digit growthWei Jianguo pointed out that despite the rocky start this year, the combined impact of the conflict between Russia and Ukraine and other factors, coupled with the resilience of the Chinese supply chains, China’s overall foreign trade will continue to maintain a trend of double-digit growth. "\\;The inflection point has not yet arrived"\\; and the growth rate may fall, but it is still a very important period of development for China’s foreign trade."\\;For the first and second quarters, China’s foreign trade is still expected to grow at double digits,"\\; said Wei Jianguo. He believes that the lost time will be very short, and there are differences between regions. "\\;For example, if Zhejiang is affected, Shandong will make up for it"\\;, remarked Wei Jianguo.Wei Jianguo said that China's overall supply chain still has strong resilience and the overall situation will not be affected by temporary lockdowns in some regions. "\\;I am still full of confidence in this year's foreign trade situation and we will continue to see steady progress amidst overall stability,” he added. As far as foreign trade is concerned, he noted that a good sign was the rapid expansion of cross-border e-commerce, with central and western regions likely to surpass their coastal and eastern counterparts in cross-border e-commerce volume in the second and third quarters of this year. As for the construction of cross-border e-commerce carriers and overseas warehouses, China has issued a raft of support policies, injecting impetus into the development of foreign trade.Wei Jianguo recognized that China’s processing trade and general trade are mainly concentrated in the coastal regions, while cross-border e-commerce has not only boosted trade in inland areas like Yunnan and Chongqing, but also attracted a large number of small and medium-sized enterprises to widely participate in the development of the international market, thus&\\;nbsp\\;expanding China's overall&\\;nbsp\\;foreign trade space.Official data show that China's cross-border e-commerce trade reached RMB1.98 trillion in 2021, with double-digit growth and an increase of nearly 10 times in five years. In the meantime, market procurement trade increased five times in six years. In 2021, China’s exports reached a new record high, with more than 1,500 comprehensive foreign trade service enterprises, more than 2,000 overseas warehouses, and 130 bonded maintenance projects completed for processing trade. Offshore trade has been growing steadily, while new business formats and models have become a new driving force to promote the transformation, upgrading and high-quality development of foreign trade.Wei Jianguo believes that China's cross-border e-commerce will continue to expand this year, to become a major pillar of foreign trade along with general trade and processing trade."\\;I am not worried about the impact of the COVID-19 pandemic on Shanghai's import and export trade. I believe that after the current situation is brought under control, Shanghai will usher in a period of fast development in foreign trade. It will not only catch up with the time lost due to the pandemic, but also bring its foreign trade volume to a higher level,"\\; said Wei Jianguo.&\\;nbsp\\;Author: Miao Qi, YICAI