Push to boost trade growth to con­tinue

China Daily (USA) - - BUSINESS - By LI XIANG lix­i­ang@chi­nadaily.com.cn

The Min­istry of Com­merce vowed on Tues­day to con­tinue its at­tempts to boost trade growth — as it said the trade out­look re­mains dim de­spite re­cent signs of im­prove­ment.

Min­istry spokesman Shen Danyang said that China’s for­eign trade was still fac­ing grow­ing down­ward pres­sure de­spite a turn­around in im­ports and ex­ports in Au­gust which showed that govern­ment poli­cies have taken ef­fect.

Shen’s com­ments fol­lowed Au­gust trade data showed a sur­pris­ing im­prove­ment, which beat an­a­lysts’ ex­pec­ta­tions, with yuan-de­nom­i­nated im­ports ris­ing 10.8 per­cent and ex­ports gain­ing 5.9 per­cent year-on-year.

How­ever over­all trade in the first eight months con­tin­ued to fall, with im­ports drop­ping 2.9 per­cent and ex­ports down by 1 per­cent from the same pe­riod of last year.

“We should not be blindly op­ti­mistic,” Shen told re­porters at a Bei­jing news con­fer­ence.

“The out­look re­mains tough and we are still fac­ing ris­ing un­cer­tain­ties and a lot of dif­fi­cul­ties which are not short­term ones.”

Shen said China would con­tinue with its poli­cies to spur trade growth and to re­duce costs for com­pa­nies.

Econ­o­mists said that while the im­prove­ment in Au­gust trade data pointed to short-term eco­nomic sta­bi­liza­tion, it was still un­cer­tain whether it would be sus­tain­able.

“Fol­low­ing an across-the­board mod­er­a­tion in July ac­tiv­ity data, we think the stronger- than- ex­pected Au­gust trade data points to some near-term im­prove­ment, although this may not be sus­tain­able,” said Chang Jian, chief China econ­o­mist at Bar­clay’s Cap­i­tal, in a re­search note.

“We be­lieve the govern­ment is likely to lean to­ward us­ing more fis­cal and quasi-fis­cal mea­sures to sup­port growth, while re­main­ing cau­tious about mak­ing broad-based in­ter­est rate cuts given high fi­nan­cial lever­age, and a po­ten­tial hous­ing bub­ble,” Chang added.

At the news con­fer­ence Shen also said that China’s en­vi­ron­ment for for­eign in­vest­ment was not de­te­ri­o­rat­ing, re­spond­ing to crit­i­cism that it was be­com­ing more dif­fi­cult for for­eign firms to in­vest in China.

“Such crit­i­cism is bi­ased and does not re­flect the over­all in­vest­ment en­vi­ron­ment in China,” he said.

The fact that some firms have had dif­fi­cul­ties in­vest­ing and op­er­at­ing in China was due to sev­eral rea­sons — in­clud­ing their di­min­ish­ing com­pet­i­tive ad­van­tage, the slow­down in global de­mand and the Chi­nese econ­omy as well as ris­ing costs — Shen said.

China’s top leg­is­la­ture ear­lier this month amended four key in­vest­ment-re­lated laws to fa­cil­i­tate growth. Start­ing Oc­to­ber, the coun­try will of­fi­cially adopt the neg­a­tive-list ap­proach, which will spec­ify in­vest­ment sec­tors that are of­flim­its to for­eign in­vestors.

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