18:45, August 17, 2009

Ministry: cautiously upbeat on trade prospect in H2 China is cautiously optimistic about the rebound of its export in the rest of the year with its strong competitiveness in labor-intensive products, expanding share in major markets, improved import but weak external demand. "The decrease rate of China's export is likely to drop in the second half of 2009. Year-on-year monthly increase is also possible," said Yao Jian, spokesman of the Ministry of Commerce (MOFCOM) at a press conference in Beijing on August 17. Yao said that China's export new order index stands at 52.1 percent in July, up 0.7 percentage points compared with the previous month. China Containerized Freight Index recorded 858.63 on August 14, up 9.08 percent month on month. In the first half of 2009, import and export cargo throughput of large scale ports is 0.2 percentage points higher than that of the first half of 2008, while the figure of January to July 2009 is 1.9 percentage points higher year on year. Those positive signs of stabilization of China's foreign trade add the possibility of a year-on-year increase in the country's export in the second half of this year, said Yao Jian. Still competitive China's labor-intensive businesses are less affected amid the global downturn. From Jan to July, US' garments and textiles import fell by 9.4 percent, but China's garment and textile export to the US fell only 0.04 percent. Rigid demand in labor-intensive products proved China's export competitiveness. China's share in other major economies' imports grew despite the global financial crisis. Chinese products' share in the imports of the US, Japan, Australia and Canada rose by 4.11, 3.8, 3.2 and 1.82 percent respectively. In the first half of 2009, China's exports to the US accounted for 18.66 percent of the US' total imports, while the figure was 14.55 percent during the same time of 2008. Its share in the emerging economies' imports also hiked. China's imports are mainly consisted of resources and raw materials. Since the breakout of the world financial crisis, their prices fell significantly. Import value fell but the volume rose. In the first half of 2009, China's ports handled a total of 160 million tons of crude oil, up 6.9 percent compared to the same period last year, as crude oil price has dropped by 51 percent since its peak. Different challenge However, we must be "cautious" about the outlook of our exports, he noted, explaining that the situation now was quite different from that in 1998 Asian Financial Crisis. This time's crisis in real economy was the result of lack of regulation in the finance sector, Yao said. Global recovery is still unclear. In July, retail sales in the US dropped 0.1 percent, much worse than the gain of 0.7 percent economists had expected. According to the data from the WTO, in July, the US' export fell 34 percent, Japan's fell 37 percent, Russia's fell 47 percent. China's export sector still has relevantly higher competitiveness. From Jan to July 2009, China's foreign trade value fell 22.7 percent year on year. Exports dropped 22 percent while imports dropped 23.6 percent. Total trade surplus witnessed a shrink of 13.1 percent. The total trade value in July recorded 200.2 billion USD, down 19.4 percent compared with the same time last year. However, the figure is higher than those of last November and December, the months right after the outbreak of the global financial crisis. The European Union remained the largest trade partner of China in the first seven months, with a bilateral trade volume of 192.73 billion U.S. dollars, down 20.7 percent year on year. The US and Japan are China's second and third largest trade partner. From January to July, the US and Japan's bilateral trade volume with China recorded 158.68 billion and 119.90 billion USD respectively. Favoring policies Yao added that China had raised export tax rebates under the WTO rules and has reduced items listed in China's "Catalogue of Prohibited Commodities in Processing Trade" from over 2,000 to less than 500. Deposit guarantee money for prohibited commodities processing trade is currently not required. China has also expanded the coverage of short-term export credit insurance, raising export enterprises' confidence. The ministry will coordinate with relevant financial institutions, insurance companies as well as customs, taxation, inspection and quarantine for better implementation of those policies. Government branches will serve export enterprises better, aiming at better trade facilitation. By People's Daily Online