Weak trade be­gin­ning to sta­bi­lize

China Daily (USA) - - FRONT PAGE - By ZHONG NAN in Bei­jing and QIU QUANLIN in Guangzhou

China’s ex­ports fell by 1.6 per­cent year-on-year to 10.06 tril­lion yuan ($1.49 tril­lion) in the first three quar­ters of the year, while over­all trade per­for­mance im­proved on a quar­terly ba­sis, cus­toms data showed on Thurs­day.

For­eign trade be­tween Jan­uary and Septem­ber was down by 1.9 per­cent to 17.53 tril­lion yuan from a year ear­lier, with im­ports drop­ping by 2.3 per­cent to 7.47 tril­lion yuan, ac­cord­ing to the Gen­eral Ad­min­is­tra­tion of Cus­toms.

Cus­toms spokesman Huang Song­ping at­trib­uted the weak fig­ures to slug­gish world growth and the lack of ef­fec­tive sup­port for global trade.

“As China con­tin­ues to face weak do­mes­tic and global mar­ket de­mand, we have dis­cov­ered that its tra­di­tional ad­van­tage in for­eign trade has shown many weak points and con­fronted dif­fi­cul­ties such as trade pro­tec­tion­ism, ris­ing op­er­a­tional costs and lim­ited mar­ket chan­nels,” said Huang.

China’s eco­nomic num­bers were fac­tored into a drop in shares on Wall Street on Thurs­day.

“China’s trade data be­low es­ti­mates is an over­hang in the mar­ket,” said Jeff Zip­per, man­ag­ing di­rec­tor of in­vest­ments for The Pri­vate Client Re­serve of US Bank.

The Dow Jones In­dus­trial Av­er­age closed 45 pointslower, or 0.3 per­cent, to 18,098. It was down as much as 184 points ear­lier. The S&P 500 lost 6 points, or 0.3 per­cent, to 2,132. The Nas­daq Com­pos­ite dropped 25 points, or 0.5 per­cent, to 5,213.

Com­pa­nies that make ba­sic ma­te­ri­als also fell. Many of those com­pa­nies rely heav­ily on ex­ports to China.

Cop­per miner Freeport-McMoRan slumped 7 per­cent, the big­gest loss in the S&P on Thurs­day.

But China’s for­eign trade has shown signs of sta­bi­liz­ing, since it rose by 1.1 per­cent year-onyear in the third quar­ter, he said.

He said the gov­ern­ment will take ad­e­quate mea­sures to sup­port for­eign trade, in­clud­ing fur­ther cut­ting taxes for do­mes­tic com­pa­nies and im­prov­ing re­search and de­vel­op­ment ca­pa­bil­i­ties for high-end man­u­fac­tur­ers, as well as en­larg­ing trade vol­ume with coun­tries and re­gions along the Belt and Road Ini­tia­tive routes.

Huang said the de­pre­ci­a­tion of the Chi­nese yuan could ben­e­fit do­mes­tic ex­porters, but would also raise the im­port costs of pro­duc­tion ma­te­ri­als, since pro­cess­ing trade still re­mains a ma­jor part of China’s trade pat­tern.

“An econ­omy’s cur­rency fluc­tu­a­tions could have a mixed im­pact on trade growth due to cross-bor­der co­op­er­a­tion along the global in­dus­trial value chain, un­der­min­ing ef­forts to boost ex­ports,” Huang said.

China’s ex­ports to coun­tries along the Belt and Road routes in­creased be­tween Jan­uary and Septem­ber. For ex­am­ple, ex­ports to Pak­istan grew by 14.9 per­cent; to Rus­sia, by 14 per­cent; Poland, 11.7 per­cent; Bangladesh, 9.6 per­cent; and In­dia, 7.8 per­cent.

Mean­while, ex­ports to the United States, China’s sec­ond­biggest trade part­ner, fell by 1.9 per­cent, and those to mem­bers of the As­so­ci­a­tion of South­east Asian Na­tions, its third-largest trade part­ner, shrank by 1.9 per­cent.

Ma­chin­ery and elec­tronic prod­ucts as well as goods in la­bor-in­ten­sive sec­tors, in­clud­ing tex­tiles and toys, ac­counted for the lion’s share of ex­port goods, and pri­vate com­pa­nies still led the coun­try’s ex­ports.

Joneaa Jeans, a Dong­guan-based gar­ment com­pany, was one of the ma­jor ex­porters of orig­i­nal equip­ment man­u­fac­turer jeans, which are used as other com­pa­nies’ end prod­ucts, to Europe last year, with sales of 130 mil­lion yuan. How­ever, its over­seas sales de­clined this year, and ex­ports dropped to 47 mil­lion yuan due to weak mar­ket re­sponse.

Xie Qundi, pres­i­dent of Joneaa Jeans, said her com­pany is look­ing for new part­ners in emerg­ing mar­kets, es­pe­cially in South Amer­ica and South­east Asia. It has also added a 12-mem­ber team to de­sign new styles of jeans for the needs of var­i­ous for­eign clients.

“Even though or­ders from abroad did show some in­crease in Septem­ber, they are much fewer than last year,” said Xie. “Our in­de­pen­dent brands and the de­pre­ci­a­tion of the yuan cer­tainly will help the sales in over­seas mar­kets.”

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