Of­fi­cial warns on ex­port out­look

China Daily (Hong Kong) - - BUSINESS - By LI JI­ABAO li­ji­abao@chi­nadaily.com.cn

There’s lit­tle cause for op­ti­mism about China’s ex­ports in 2014, be­cause de­mand in both de­vel­oped and de­vel­op­ing coun­tries is grow­ing too slowly to boost pur­chases of the na­tion’s prod­ucts, a com­merce of­fi­cial told China Daily.

Mean­while, ris­ing do­mes­tic costs are erod­ing China’s tra­di­tional com­pet­i­tive ad­van­tage in prices, forc­ing the gov­ern­ment to “fight hard for steady trade growth” in the com­ing year.

“Con­cern­ing for­eign trade next year, China is fac­ing a dif­fi­cult or very dif­fi­cult out­look. In other words, we have to work hard for steady growth,” Song Li­hong, deputy di­rec­tor­gen­eral of the Com­pre­hen­sive Depart­ment at the Min­istry of Com­merce, said in an ex­clu­sive in­ter­view.

“In past years, when the world econ­omy was do­ing well, China’s for­eign trade ex­panded rapidly and even out­paced the over­all growth of world trade. But this time around, the re­cov­ery in de­vel­oped economies or in the world econ­omy as a whole didn’t have the usual im­pact on growth in our for­eign trade.

“The di­ver­gence shows that our tra­di­tional com­pet­i­tive ad­van­tage is ebbing, not to men­tion that the world eco­nomic re­cov­ery is frag­ile. As to our ex­ports next year, it’s hard to say any­thing op­ti­mistic,” Song said.

He added that the gov­ern­ment’s com­mit­ment to steady trade growth in 2014 “must be ac­com­pa­nied by an im­prov­ing trade struc­ture.”

Long Guo­qiang, a re­searcher at the De­vel­op­ment Re­search Center of the State Coun­cil, said that de­vel­oped economies are see­ing a steady re­cov­ery, but their ap­petite for Chi­nese prod­ucts is weak­en­ing.

“The United States re­cov­ery is based on its mone­tary stim­u­lus and the im­prove­ment of the real es­tate sec­tor, while Ja­pan’s eco­nomic im­prove­ment came from cur­rency de­val­u­a­tion, which ben­e­fits its own ex­ports.

“What’s more, other de­vel­op­ing economies will pose more com­pe­ti­tion for Chi­nese busi­nesses in de­vel­oped mar­kets. China’s ex­ports in 2014 will not see a sig­nif­i­cant im­prove­ment from this year,” Long said.

In the Jan­uary- Novem­ber pe­riod, China’s for­eign trade rose 7.7 per­cent year-on-year to $3.77 tril­lion. Ex­ports were up 8.3 per­cent to $2 tril­lion, and im­ports rose 7.1 per­cent to $ 1.77 tril­lion, yield­ing a trade sur­plus of $234.15 bil­lion, ac­cord­ing to the Gen­eral Ad­min­is­tra­tion of Cus­toms.

The spokesman for the Com­merce Min­istry, Shen Danyang, said on Wed­nes­day that ex­ports in De­cem­ber will main­tain “good mo­men­tum”, but ex­porters who had been sur­veyed re­mained “cau­tious” about the near fu­ture.

China is the world’s largest ex­porter and sec­ond- largest im­porter. Steady ex­port growth not only supports the em­ploy­ment of mil­lions of work­ers, it also pro­vides the nec­es­sary room for the gov­ern­ment to re­struc­ture the econ­omy away from ex­ports and in­vest­ment and to­ward con­sump­tion.

Dur­ing last week’s Cen­tral Eco­nomic Work Con­fer­ence, China’s high­est-level eco­nomic meet­ing, the gov­ern­ment vowed to sup­port the role of ex­ports in next year’s eco­nomic growth.

While re­tain­ing the na­tion’s tra­di­tional ex­port ad­van­tages, the gov­ern­ment also plans to en­hance the in­flu­ence of tech­nol­ogy and cre­ate new com­par­a­tive and com­pet­i­tive ad­van­tages.

Higher costs have acted as a drag on China’s ex­ports in re­cent years. Av­er­age an­nual ex­port growth slowed to 9.4 per­cent from 2008 to 2012, com­pared with 27.2 per­cent from 2001 to 2008, the com­merce of­fi­cial said, not­ing the con­trac­tion in global de­mand fol­low­ing the 2008 fi­nan­cial cri­sis.

“Higher costs, mainly for wages, re­flect the de­creas­ing la­bor sup­ply and the im­prove­ment of work­ers’ wel­fare. Chi­nese busi­nesses, as well as gov­ern­ment de­part­ments, should take an ac­tive part in the na­tion’s ex­port trans­for­ma­tion. They must aban­don the strat­egy of cap­tur­ing mar­ket share with low prices and high vol­umes,” Song said.

“En­ter­prises must en­hance prod­uct qual­ity and value by re­ly­ing on in­no­va­tion, de­sign, mar­ket­ing and im­proved lo­gis­tics. We’ll have our own transna­tional cor­po­ra­tions, with a global vi­sion and world­wide reach, if they can in­te­grate re­sources across bor­ders.

“As for the gov­ern­ment, it should pro­vide a fa­vor­able pol­icy en­vi­ron­ment for the trans­for­ma­tion of en­ter­prises. We will en­hance in­tel­lec­tual prop­erty rights pro­tec­tion to en­cour­age in­no­va­tion, and we will in­crease pro­fes­sional train­ing and vo­ca­tional ed­u­ca­tion to meet the de­mands of the trans­for­ma­tion.

“We will also tap the ben­e­fits of shift­ing man­u­fac­tur­ing plants to low-cost cen­tral and western re­gions, while sup­port­ing the con­sumer mar­kets in pop­u­lous ar­eas,” he said.

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