Ministry: China to further boost hard-hit foreign trade

China's foreign trade will continue struggling due to the severe contraction of the international market and the government will adopt more policies to facilitate the country's exports and imports, according to a press release from the Ministry of Commerce on April 15.

Yao Jian, the spokesperson for the Commerce Ministry, warned that China's export would be negatively affected by the external demand downturn, trade financing problem and protectionism in international markets. Foreign trade is China's hardest hit sector in the financial crisis, he said.

The imports for the country's processing trade plummeted 35.7 percent in the first quarter of the year. The decrease is 8.1 percentage points higher than that of general trade. As processing trade contributes most of China's exports, the downturn in the imports for the processing trade is an important signal of the severe reality of China's exports.

The WTO has forecasted a 9 percent decline of world trade in 2009, the biggest drop since World War II, and estimated at least 100 billion USD of trade financing shortage.

However, we should be confident about China's foreign trade if we consider the current global context, said Yao.

He believes that China's labor-intensive products, telecom equipment and general machineries will be particularly competitive on the international market.

Customs statistics show that China's labor-intensive export enjoyed a robust growth in March. In March exports of apparel, furniture, shoes and bags all increased year-on-year by a large margin.

Yao thinks that the investment spree on infrastructure in many countries will bring many business opportunities for Chinese suppliers of telecom equipment and machinery.

More than half of China's exports are from machinery and electronic products. Such exports went down by 18.8 percent in March from the same month of last year, but up by 25.6 percent over February.

Yao disclosed that more support on financing and insurance would be given to the export of large equipment, which relies heavily on trade financing.

He added that measures would be taken to help small and medium sized enterprises (SMEs) expand their business on the international market. Support for SMEs is far from enough he recognized, promising better service from the Commerce Ministry to help SMEs with their marketing for overseas markets.

He also hopes that the 105th trade fair under way would be an opportunity for SMEs to get more orders from the overseas markets.

China's steel industry is facing increasing trade remedy measures. On April 8, the European Commission announced its decision of imposing temporary anti-dumping duties on seamless steel pipes from China. The same day the US steel enterprises and gilds filed an application for anti-dumping and countervailing investigations into steel pipe imported from China used in oil and gas drilling.

According to Yao, China exported about 3.2 billion USD of such products to the US in 2008 and China's exports of steel products dropped by 55 percent in the first three months of the year. The Ministry of Commerce has raised the issue to the US Embassy in Beijing and an official delegation will go to the US for further talks.

We hope that the US government would act cautiously on the case; otherwise it will have a serious negative impact on bilateral economic and trade relations, Yao said, warning that China would take proper reactions according to the development of the case.

The WTO also warned that mounting protectionism had deteriorated the global trade contraction which in turn would prolong the economic recession.

Yao reiterated China's policy consistency on its opening-up policy as a basic national strategy and its opposition to protectionism.

He added that China would encourage imports of advanced technologies, environmental protection products, key components and parts as well as commodities to achieve trade balance.

Customs data shows that China's total foreign trade was down by 24.9 percent year on year in the first quarter of this year. But there are signs of improvement in March, when the downturn of total foreign trade, exports and imports all slowed and the import prices rose by 2.7 percent over the previous month.

Source: People's Daily Online