China's imports and exports are expected to exceed 2.5 trillion in 2008, up by some 18 percent over last year, with tech-intensive exports and service trade growing fast, said Chinese Minister of Commerce Chen Deming on Dec. 23.
He pledges to take further steps to sustain the steady growth of foreign trade and hopes that countries around the world strengthen coordination to maintain the basic stability of the international foreign exchange market.
Chen recognizes that China's foreign trade is facing severe challenges as the global financial crisis is still spreading and deepening. Weak external demand will last for a relatively long time when the US, euro and Japanese economies are all struggling with recession. Shrinking international market may fuel trade protectionism and trade disputes. Risk of default will increase as the credit crunch has deteriorated in some countries and regions, making it more difficult for importers and distributors to finance their business.
China's export dropped in November for the first time in seven years. Chen thinks the slowdown reflects both the impact of the international financial crisis and postponed export by some companies to take the advantage of the latest tax rebate policy which is effective as of Dec. 1.
The Ministry of Commerce will adopt more supportive polices, encourage enterprises to tap the emerging markets, optimize export structure, and promote the service trade and expand imports. Chen stresses that China will not resort to depreciation of its currency RMB to boost its export. He also calls for world's joint efforts to keep the stability of the international forex market.
"The market will play a bigger role so that enterprises will be more motivated to bring down costs, provide innovative products and explore the market," said Chen.
Chen points out positive conditions that will spur China's foreign trade next year. The government has adopted proactive fiscal policy and moderately easy monetary policy. Supportive measures have also been taken in foreign trade specifically, including higher tax rebates, adjustment of processing trade policy, and easier credit access for small and medium sized enterprises.
Chen is confident in the competitiveness of Chinese products. Labor intensive consumer goods such as textile products are less affected by shrinking external demand. And there are more potential in emerging and developing countries. Exports to those markets such as Brazil and India is rising fast while exports to Europe, the US and Japan is slowing down notably.
Chen said the exports of China-branded products with higher technology content and added value are increasing remarkably. In addition, the service trade is expected to exceed 300 billion USD. Service export goes up by 29.6 percent over the first three quarters of the year.
Machinery and electronic products account for more than half of China's total foreign trade. The latest figure of the Ministry of Commerce shows that China's machinery and electronic exports and imports grow by 20 percent and 10.9 percent respectively from January to November this year. Nearly three quarters of imports and exports are made by foreign companies in China.
Chen noted that the Ministry of Commerce will focus more on boosting the domestic consumption. However, he also highlights that the external demand is still an important driving force for China's economy and it in turn is translated into domestic demand by boosting investment and employment in export-oriented sectors.
Chen also reiterates China's commitments on working with other WTO members to translate political will to concrete actions to push the talks on Doha Development Agenda ahead. Although the major efforts of WTO members in July and December failed, he said, it is widely agreed that an earlier success of the Doha round will contribute to coping with the current financial crisis and containing the trade protectionism to give strong impetus to the world economy.
China has been consistently supporting and engaged in the Doha Round over the past seven years. It has put forward more than 100 proposals and facilitated communication between members divided by disagreements on major issues.
By People's Daily Online
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