BEIJING, April 24 (Xinhua) -- Since its inception in 2013, the Belt and Road Initiative (BRI) has provided impetus for the expansion of China's trade with other countries, especially the Belt and Road (B&R) countries, and sparked innovation in trade patterns such as cross-border e-commerce.
Rising along with China's foreign trade is the use of Chinese currency renminbi (RMB) or the yuan in cross-border settlement, which is expected to further facilitate global trade and investment by lowering transaction costs and risks.
As B&R construction advances, China will continue to boost unimpeded trade with countries and regions along the routes to bring benefits to all.
-- New engine driving foreign trade
The trade cooperation between China and B&R countries and regions has been growing rapidly in recent years, serving as a new engine propelling China's foreign trade development.
The imports and exports between China and B&R countries valued two trillion yuan in the first quarter of this year, up 7.8 percent year on year, Li Kuiwen, spokesperson of China's General Administration of Customs (GAC) said on April 12, adding that during the same period, China's trade with B&R countries was 4.1 percentage points higher than its foreign trade and took up 28.6 percent of its total imports and exports.
China's imports and exports with those countries hit a record high of 8.37 trillion yuan in 2018, up 13.3 percent year on year and 3.6 percentage points higher than the national growth rate last year, GAC statistics showed.
The steady expansion of China's trade with B&R countries in 2018 could mainly be attributed to the deepening policy coordination between countries, as well as the increasing import volume and price of bulk commodities. Specifically, China signed cooperative documents last year with more than 60 countries from Asia, Africa, Oceania and Latin America, further enhancing trade relations with the economies, GAC analyzed.
The goods trade volume between China and countries involved in BRI surpassed six trillion U.S. dollars from 2013 to 2018, showing an average annual growth of four percent and accounting for 27.4 percent of China's total trade in goods in the same period, according to Gao Feng, spokesperson of China's Ministry of Commerce (MOC).
In general, BRI has increased trade flows among participating countries by up to 4.1 percent, according to World Banks's recent paper on trade effects of BRI on 71 countries potentially involved.
Innovative trade patterns like cross-border e-commerce (CBEC) emerge as new channels for the fast-growing economic and trade cooperation between countries under BRI.
The retail imports and exports through Chinese customs' CBEC management platform reached 20.3 billion U.S. dollars in 2018, up 50 percent year on year. So far, China has established bilateral e-commerce cooperation mechanisms with 17 countries, Gao Feng said at a press conference last week.
China's cross-border e-commerce format greatly lowers global trade barriers as the scale of doing business online doesn't need to be huge. Thereby, it is involving more participants, especially small- and medium-sized enterprises, in commerce worldwide, said Liao Xiaoqi, former Vice-Minister of MOC.
-- Increasingly popular cross-border RMB settlement
The use of RMB in cross-border settlement is gaining popularity with the rise of international trade driven by BRI.
About 5.11 trillion yuan worth of cross-border trade was settled in RMB in 2018, compared with 4.36 trillion yuan in 2017, according to the People's Bank of China (PBOC), China's central bank.
RMB as a settlement currency had been recognized by many foreign entities, according to a market survey carried out by Bank of China in 2017. For 53 percent of the surveyed foreign entities, the most frequently used RMB product was cross-border RMB payment.
RMB products most frequently used by foreign institutions
Another market report showed that a total of 71 Fortune 500 companies that have set up headquarters in Shanghai have engaged in cross-border RMB business. Among them, some multinational companies even have all of their deals with Chinese enterprises settled in RMB.
Behind the popularity of cross-border RMB settlement is the recognition of the use of RMB in international trade to hedge against exchange rate risks and reduce currency conversion costs so as to push forward trade and investment.
China has been stepping up the establishment of RMB clearing and settlement mechanisms for more in-depth trade relations with B&R countries. The second largest economy of the world has made bilateral currency swap arrangements with more than 20 B&R countries and RMB clearing arrangements with seven B&R countries, and signed cooperation agreements with the financial supervision authorities of 35 B&R countries, according to a report released on Monday elaborating on the progress, contributions and prospects of BRI.
For example, Bank of China Tokyo branch launched its RMB clearing business last Wednesday in Tokyo, taking a step closer to become an offshore RMB trading hub.
The establishment of the RMB clearing mechanism in Japan will help Chinese and Japanese companies and financial institutions to use the RMB for cross-border transactions as well as facilitate trade and investment between the two countries, said Chen Siqing, chairman of Bank of China.
The yuan settlement in cross-border trade started in 2009 and picked up pace in 2016 when the International Monetary Fund included the Chinese currency to its basket of the Special Drawing Right (SDR). The inclusion of yuan in SDR further illustrated China's significant role in global trade.
-- Dedication to unimpeded trade
As B&R construction advances, China will keep promoting unimpeded trade with B&R countries and regions.
China will introduce measures to upgrade its comprehensive bonded zones in line with international standards to sustain steady growth in foreign trade and investment, and help partners build open economies, according to the State Council of China.
To make it easier for trade flows, GAC vows to cut average clearance times in half by the end of 2021 and continue to improve the information system for cross-border e-commerce retail transactions.
China's trade growth rate is expected to outperform that of the world, and its market share will continuously increase in global trade in 2019, said Zhang Yuyan, director of the Institute of World Economics and Politics of the Chinese Academy of Social Sciences.
Meanwhile, China will continue its efforts to promote financial integration with B&R countries in the future.
MOC will go on to improve the financial infrastructure construction, while facilitate enterprises' more convenient use of RMB in cross-border trade and investment amid further opening-up, according to Li Chenggang, China's assistant commerce minister. (Contributed by Su Dan)