MoC warns of fur­ther fall in for­eign trade

China Daily (Canada) - - BUSINESS - By YAOJING yaojing@chi­nadaily.com.cn

As China’s for­eign trade un­ex­pect­edly slipped in the first quar­ter in 2014, the Min­istry of Com­merce ratch­eted up its warn­ings about a fur­ther drop in April, but pre­dicted a pickup in May and a con­tin­ued re­cov­ery within this year.

Mean­while, the min­istry is speed­ing up its test­ing and in­ves­ti­gat­ing in main­tain­ing the growth of ex­ports, pro­vid­ing fuel for the trans­for­ma­tion of the pro­cess­ing trade.

“We are ex­pect­ing a bet­ter per­for­mance in for­eign trade in the sec­ond quar­ter, but the bounce may be ar­riv­ing in May,” said Shen Danyang, a min­istry spokesman, at a news con­fer­ence on Thurs­day in Bei­jing.

“The full-year trade growth will be sim­i­lar to last year — and we are con­fi­dent of reach­ing that goal,” said Shen.

De­spite the 3.7 per­cent de­cline in to­tal for­eign trade, ex­ports to sig­nif­i­cant mar­kets, such as the Euro­pean Union, United States and mem­bers of the As­so­ci­a­tion of South­east Asian Na­tions, in­creased more than 5 per­cent re­spec­tively in the first quar­ter.

Fur­ther, in terms of goods, ex­ports of color tele­vi­sion sets, elec­tric mo­tors, steel, toys, ce­ramic prod­ucts, fer­til­iz­ers and other bulk com­modi­ties, China re­al­ized a year-on-year growth of more than 10 per­cent in the same pe­riod.

“We have to pay close at­ten­tion to the full-year trend against the back­ground of the re­cov­ery in de­vel­oped economies and the slow­down in emerg­ing coun­tries,” Shen said.

But Shen men­tioned that pos­i­tive fac­tors, in­clud­ing the re­silient de­mand of the global mar­ket, the im­prove­ment of com­pet­i­tive­ness among Chi­nese man­u­fac­tur­ers and the govern­ment’s de­ci­sion to boost and up­grade ex­ports, will help the world’s sec­ond-largest econ­omy to pro­duce a sat­is­fac­tory out­come at the end of this year.

Thanks to the re­cov­ery in the US and Europe, and with de­vel­op­ing economies con­tin­u­ing to out­pace de­vel­oped economies in terms of GDP growth, global trade is ex­pected to grow by 4.7 per­cent in 2014, com­pared with 2.1 per­cent in 2013, ac­cord­ing to the World Trade Or­ga­ni­za­tion.

“While there is a sta­ble global de­mand and the up­grad­ing in China continues it is pos­si­ble for China to main­tain a bet­ter per­for­mance in global trade,” said Shen.

Nonethe­less, Song Hong, an econ­o­mist at the In­sti­tute of World Eco­nom­ics and Pol­i­tics at the Chi­nese Academy of So­cial Sci­ences, cau­tioned that the phas­ing-out of quan­ti­ta­tive eas­ing in the US will af­fect some emerg­ing economies, such as Turkey and In­done­sia.

“The in­flu­ence

of

fluc­tu­at­ing

cap­i­tal flows in emerg­ing coun­tries may ex­pand into China’s for­eign trade per­for­mance be­cause emerg­ing economies are im­por­tant Chi­nese trad­ing part­ners,” Song said.

At the same time, as a man­u­fac­tur­ing power, en­cour­ag­ing a mild re­cov­ery is also chal­leng­ing the govern­ment’s guid­ing and sup­port­ing poli­cies.

In the first quar­ter, the to­tal pro­cess­ing trade dropped 8 per­cent to 1.87 tril­lion yuan com­pared with the same pe­riod last year.

“The pro­cess­ing trade has been play­ing a sig­nif­i­cant role in in­creas­ing em­ploy­ment, in­creas­ing the num­ber of in­dus­tries and pro­mot­ing eco­nomic de­vel­op­ment,” said Shen.

Shen said the min­istry is con­duct­ing re­search among man­u­fac­tur­ers and ex­perts in a bid to ramp up mea­sures to main­tain steady growth and ac­cel­er­ate the re­struc­tur­ing of the pro­cess­ing trade.

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