China's better-than-expected trade growth in the first quarter signals an improving environment for the second quarter and full-year trade growth of 10 percent, the Ministry of Commerce said on Tuesday.

Foreign trade expanded 7.3 percent in the first quarter, reflecting many factors including slack overseas demand, rising domestic costs and trade friction, Shen Danyang, spokesman for the ministry, told a regular news conference.

"It is worth noting that the growth achievement in the first quarter was not easy, since the country was adjusting its trade structure and pursuing balanced trade.

"The growth rate, which is better than expected, shows that measures to stabilize trade are taking effect and the continuous slowdown in trade growth since August has been halted.

"Trade is now moving into a period of steady growth at a low rate," Shen said.

"The trade scenario for the second quarter will keep improving and the full-year trade growth goal" of 10 percent set by the central government "can be achieved", he said.

He added that external and internal conditions are very difficult.

"The global economy still lacks strong momentum for growth, while the world trade environment is becoming more challenging.

"The continuous cost increases at home have narrowed the profits of exporters, and China's conventional exports are loosing their competitive edge.

"Meanwhile, medium- and high-end exports are under great pressure in developed economies," Shen said.

Zhong Shan, deputy minister of commerce, said on Tuesday that sluggish overseas demand was reducing global purchases of Chinese exports.

The ongoing Canton Fair, which started on Sunday, is seen as a barometer of China's foreign trade.

The fair saw "increased participation by Monday but smaller amounts of deals year-on-year, implying a challenging situation for China's foreign trade", according to Zhong.

Gong Hui, general manager of Chongqing Longxin Engine Co Ltd, forecast a decline of 10 to 20 percent in motorcycle exports in 2012 because of "shrinking overseas demand caused by financial problems in the United States and the European Union, as well political turmoil in the Middle East and Africa".

With the People's Bank of China having widened the daily trading band of the yuan against the US dollar to 1 percent from 0.5 percent, effective Monday, exporters at the Canton Fair also called for stable export policies, including "a foreseeable appreciation of the yuan", according to Guo Jian, president of Mindong Yanan Electrical Machine Co Ltd.

First-quarter exports rose 7.6 percent, while imports rose a more moderate 6.9 percent as a result of cooling domestic demand, slowed processing trade and domestic price declines for bulk commodities, according to Shen.

Trade friction "worsened the trade environment and posed new barriers to China's export growth", Shen said.

China was the target of 16 trade remedy investigations in the first quarter, 1.8 times the number a year earlier, which involved exports worth about $3 billion, up 2.4 times, according to the ministry.

Despite tough conditions for China's foreign trade, exporters still can compete because of inelastic demand, Zhong said.

The ministry will urge enterprises to further cultivate emerging markets and build up their own brands and overseas sales networks.

It will also help the processing trade move up the industrial chain and move to central and western parts of China where costs are lower, Shen said.

Contact the writers at lijiabao@chinadaily.com.cn and dingqingfen@chinadaily.com.cn

(China Daily 04/18/2012 page13)