Difficult months on horizon for nation's exports

Updated: 2012-03-24 07:50

By Ding Qingfen (China Daily)

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The situation surrounding China's exports will become more complicated and severe in the coming months amid an increasing number of trade protectionist measures and slackening global demand, the Ministry of Commerce said on Friday.

China will roll out policies regarding currency and tax rebates to bolster exports, Zhong Shan, deputy minister of commerce, said at a forum in Beijing, adding that it will be more arduous for the Chinese government to stabilize export growth.

According to the General Administration of Customs, China's exports declined 0.5 percent over the year in January, the first fall in more than two years. During the first two months, Chinese shipments grew by merely 6.9 percent year-on-year.

The figures are far less than the previous year and they set a pessimistic tone for the whole year, Zhong said.

From January to February of 2011, China's exports grew by 21.3 percent year-on-year.

According to Zhong, industrial competitiveness, global demand and the business environment are the decisive trends for the nation's exports, and they are all "not favorable".

China is losing its dominant competitiveness in labor costs as the nation pledges to raise minimum wages for workers to improve their livelihoods, Zhong said.

"The world economy is entering into a very difficult period, and trade cases targeting Chinese goods are growing," he said.

The United States recently announced it was setting up the Interagency Trade Enforcement Center to see whether its trade partners play by the rules. The move is widely seen as increasing frictions between China and the US.

In the first 11 months of last year, 58 trade remedy cases were launched worldwide against China, and China has been the major target for trade protectionism for a decade.

Earlier this month, Premier Wen Jiabao set a target of 10 percent for foreign trade growth this year.

Zhong said the measures China will take to try to stabilize exports include "improving policies related to foreign trade, encouraging exporters to sharpen competitiveness in technology, brand, quality and service, and guiding them to prioritize selling goods to emerging markets, shifting away from developed markets led by the US and the EU".

Li Gang, an expert on European economic issues with the Chinese Academy of International Trade and Economic Cooperation affiliated with the ministry, said China's exports to the EU will be severely challenged this year as the region's economy is on a downward trend.

According to Customs, from January to February, China's exports to the EU, the largest trade partner for China, dropped 1.1 percent from a year earlier.

"The second half will be better than the first half, but the growth of Chinese shipments to the region will probably drop to single digits this year," Li said.

Yet some analysts said China's exports are resilient.

"Despite the negative factors at home and abroad, China could achieve growth above 10 percent in 2012," said Bi Jiyao, a researcher at the Academy of Macroeconomic Research with the National Development and Reform Commission.

Despite the slowdown in export growth, "we can never ignore the significance of exports in driving the economy and industries, and in creating jobs", said Wang Shouwen, director of the department of foreign trade of the ministry.

"There is a lot of room for foreign trade and exports to grow," Wang said, as China accounted for only 11 percent of global foreign trade in 2011 and Chinese industries still enjoy advantages worldwide.