Trade faces mount­ing chal­lenges

China Daily (Hong Kong) - - FRONT PAGE - By LI XIANG lix­i­ang@chi­nadaily.com.cn

Prospects for China’s for­eign trade re­main chal­leng­ing as ris­ing pro­tec­tion­ism and in­ter­na­tional po­lit­i­cal un­cer­tain­ties, in­clud­ing US trade pol­icy un­der Don­ald Trump’s pres­i­dency, will likely weigh on Chi­nese ex­ports, of­fi­cials said on Fri­day.

China’s to­tal for­eign trade vol­ume de­clined by 0.9 per­cent year-on-year to 24.33 tril­lion yuan ($3.5 tril­lion) in 2016. Ex­ports de­creased by 2 per­cent from a year ear­lier to 13.84 tril­lion yuan, while im­ports grew by 0.6 per­cent to 10.49 tril­lion yuan, ac­cord­ing to cus­toms data.

“The ris­ing trend of antiglob­al­iza­tion and pro­tec­tion­ism has in­creased the un­cer­tain­ties in the global econ­omy,” said Huang Song­ping, spokesman for the Gen­eral Ad­min­is­tra­tion of Cus­toms, at a news con­fer­ence.

But the en­cour­ag­ing signs are that China’s for­eign trade started to re­cover in the third and fourth quar­ters, re­vers­ing the sharp de­cline in the first two quar­ters. To­tal trade vol­ume in­creased by 3.8 per­cent year-on-year in the fourth quar­ter.

The re­cov­ery in China’s for­eign trade was sup­ported by fa­vor­able gov­ern­ment poli­cies as well as im­proved external de­mand in Europe and the United States, Huang said.

Ex­ports to emerg­ing mar­kets, in par­tic­u­lar coun­tries cov­ered by the Belt and Road Ini­tia­tive, saw dou­ble-digit growth in the past year, the data showed.

Huang said China’s trade could face head­winds gen­er­ated by ris­ing in­ter­na­tional po­lit­i­cal un­cer­tain­ties, in­clud­ing the fall­out from Brexit and ma­jor elec­tions in Europe and South Korea. The gov­ern­ment is also pay­ing close at­ten­tion to US trade pol­icy un­der the ad­min­is­tra­tion of Trump, who will take of­fice on Fri­day.

“The chal­lenges fac­ing China’s trade are not in the short term. But the econ­omy is re­silient enough to han­dle them,” he said.

Wang Tao, chief China econ­o­mist at UBS Group AG, said the Trump ad­min­is­tra­tion will likely adopt more trade pro­tec­tion­ist mea­sures against China, al­though the like­li­hood of an all-out trade war is slim.

“There are a lot of un­cer­tain­ties sur­round­ing Trump’s trade pol­icy. But a trade war is very un­likely, since it would be a lose-lose sit­u­a­tion and would also hurt the in­ter­est of US com­pa­nies,” Wang said.

Chi­nese ex­porters are also pre­par­ing for ris­ing un­cer­tain­ties in the global mar­kets and are ex­pect­ing more sup­port­ive poli­cies from the gov­ern­ment to help them win back or­ders from com­peti­tors in South­east Asia.

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