China had reported a foreign trade surplus for 48 months straight since May 2004. The monthly amount of surplus was above 20 billion dollars during the last eight months of 2007. But this year, there has been a notable decrease in foreign trade surplus. Customs statistics show that China's export volume was 424.59 billion dollars and import volume 263.59 billion dollars from January to April 2008 – the trade surplus decreased 7.9 percent (4.94 billion dollars) year-on-year to 58 billion dollars.
A report on China Customs holds that the drop in trade surplus is the consequence of various factors at home and abroad; and these factors and their influences are unlikely to change in the short term. Therefore, it predicts that exports will continue to slow and imports will be on the rise this year. The imbalance in foreign trade will be curbed.
The report attributes the significant drop in foreign trade surplus to the following：
A series of macro-control measures have taken effect. China has launched a series of macro-control measures in an effort to change the growth mode of foreign trade and curb the rapid growth of trade surplus. The releases of tight export policies have slowed down the growing momentum of exports. The expansion of restricted commodities categories leads to a significant slow down in processing trade exports; and the strategy to boost imports has brought about a significant rise in imports. In the first four months, exports have slowed down and imports increased, which is the major reason for the drop in foreign trade surplus.
Quickened RMB appreciation has depressed exports and boosted imports. The appreciation of the RMB against the US dollar has accelerated notably this year. The appreciation is unfavorable for exports because it weakens the price advantages of exported commodities; but it is beneficial for imports as it saves on the purchasing cost of imported commodities. Some export-oriented companies have subsequently increased the ratio of import business.
The U.S. Subprime mortgage crisis has influenced outside demands. At present, the impact of the crisis is spreading from the financial sector to the tangible economy. From January to April, China's exports to the U.S. increased only 6.9 percent, and were down 12.4 percent. Due to the dependence of China's major trade partners like the EU and Japan on the U.S., the negative impact is extending to other economic entities. In effect, there is the rising risk of global economic slowdown.
International trade protectionism has hindered the exports of traditionally advantageous commodities. The protectionism against China has been prevalent, with measures continuously upgrading. In first quarter this year, there were 17 anti-dump and anti-subsidy investigations against Chinese products, valued at 1.91 billion dollars. Among the main products influenced by "quality and safety," vegetables, marine products, and toys have caused a drop of 0.3 percent in export growth.
High demands for some rare products on the domestic market have also contributed to the drop in trade surplus. In this crucial stage of industrialization, China has very high demands for important materials, resources and energy. But China's ability to supply these products is far behind the growth of demand. The huge gap between demand and supply has to be made up by imports. In addition, the rise in labor prices and living standards has further caused the shrink in trade surplus.
The hike in primary products'imported prices has caused a great increase in import volume. Under the influence of the U.S. dollar's depreciation, the prices of primary products on the international market have begun to rise; and such price hikes have influenced imports. As a result of price hikes, from January to April, China reported an increased import volume of 36.7 billion dollars, accounting for 45.8 percent of gross import volume in the period. This has driven overall import growth to rise by 12.8 percent.
By People's Daily Online
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