Yearend: China's Foreign Trade to Face Severe Challenges Next Year

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Last updated at: (Beijing Time) Tuesday, December 25, 2001

Yearend: China's Foreign Trade to Face Severe Challenges Next Year

The uncertain factors of the world economic environment are looming large. It has made China's foreign trade perspective more hazy. This year has witnessed the most difficult year after Asian financial crisis. Influences on China's imports and exports brought about by World economy recession even exceeded the Asian financial crisis.

As the case stands China's foreign trade growth rate will as predicted drop by 25 percent this year.

The situation will not see a radical change next year, especially after the US 911 incident, the world economy indicates an increasing threat of falling into recession. China needs an adaptation process to meet changes in world trade environment as it has just joined the WTO and so China's foreign trade will face great challenges.

According to analysis, unfavorable factors for China's foreign trade in the year 2002 include:

First, China's foreign trade system is not yet suited to the great changes in world trade environment after WTO entry. Export tax refund system is not completed in which export encouragement measures are restricted, imports management not efficient and import adjustment measures are not perfect. All these factors will exert pressures on China's foreign trade in a short period to come.

Secondly, the 911 incident delayed world economy recovery process. It showed an increasing waver in world foreign exchange and capital market, thus making China to face with more risks in foreign trade. International Monetary Fund lowered its predications on economic growth rate of the US, Japan and EU. As the three markets make up 70 percent of China's exports, the economic trend will exercise a direct affect on China's exports.

Thirdly, we see the strengthening of regional economy and trade protectionism. So far, some 450 anti-dumping cases and measures against China have been launched with total export losses hitting 10 billion US dollars, and foreign countries will further intensify their anti-dumping and protection measures against China after its WTO entry.

Fourthly, China's overall export competition is not strong, export commodities are not of hi-tech value, enterprise management at low level and government administration is required to improve its efficiency. Currency devaluation in some Southeast Asian countries will also impose more competitiveness to China's products.

However, next year's export is by no means in the dark. It spotlights in the following aspects: first, world economy and trade growth rate of next year are expected to be higher than that of this year, secondly, China's economy performs very steadily and economy is expected to grow by 7 percent. The external environment of export products will be improved and hi-tech product imports will also be on the increase.

News Analysis: Challenges and Opportunities Together for China's Foreign Trade

Despite the continuous slowdown of the world economy and the sluggish global market demand, China continues to seize every opportunity to boost its foreign trade.

Some 101,000 foreign businessmen attended the just-closed China Export Commodities Fair held in Guangzhou, capital of south China' s Guangdong Province, declined 9 percent; export volume from the event was 13.367 billion U.S. dollars, down 15.4 percent from last year. Full story

Growth of China's Foreign Trade (1995-2000)

(Unit USD$ 1 billion)

Year	Imports	Exports
1995	132.1	148.8
1996	138.8	151.1
1997	142.4	182.7
1998	140.2	183.8
1999	165.8	194.9
2000	225.1	249.2

By PD Online Staff Li Yan

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