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China faces challenges in reaching trade target

Updated: 2013-11-05 07:11
By Li Jiabao ( China Daily)

Peng Wensheng, chief economist at China International Capital Corp, an investment banking group, said in a research note that while imports will grow steadily in the fourth quarter of this year, exports will remain sluggish in the coming months owing to currency appreciation, unsatisfactory demand in developed economies undergoing recovery as well as increased uncertainties of growth in emerging economies. China's exports to the US will probably decrease in October because of the temporary government shutdown while exports in December will see little growth compared with last December's values, which were the largest in 2012.

Shen, the spokesman, said on Oct 17 that the external environment of China's foreign trade remains "challenging and complex" owing to lackluster demand from emerging economies which saw capital outflows, currency depreciation, worsened inflation and growth slowdown. Meanwhile, rising costs at home, including appreciation of the yuan and higher labor wages, continue to burden China's trade enterprises.

Zhang from the Development Research Center of the State Council said that the 8 percent growth target of China's foreign trade serves as a guide rather than a mandatory goal.

"It is of more significance to emphasize the country's improvement in trade structure than eyeing the speed of growth and the target, which is short-sighted," Zhang said.

Shen said that China's foreign trade demonstrated three characteristics in the first nine months of this year: reduced dependence on the markets of the US, the European Union and Japan, a narrowed share of processing trade value in overall trade and the increased role of private businesses.

Between January and September, the processing trade, accounting for 32.3 percent of overall trade, edged up 0.7 percent from a year earlier while general trade, which measures higher value-added elements and the country's trade independence, rose 7.8 percent year-on-year and accounted for 52.8 percent of the total trade value in the same period, according to the General Administration of Customs.

Meanwhile, China's processing trade is also shifting from assembling to higher rungs in the ladders of value chains, such as research and development, design and brand building, said customs agency spokesman Zheng Yuesheng.

In addition, the exports of primary products increased 6.4 percent year-on-year in the first nine months, much lower than the 8 percent export growth in the same period, while China's improvement in manufacturing reduced the imports of high-tech products and the country even sold some high-end products, such as auto parts, abroad, Zheng said.

"China's trade is moving toward a good direction in view of the optimization of markets and increased value-added in exports," Zhang said.

 

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