Analysis: China's Export Growth Likely to Reach 8 Percent

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Last updated at: (Beijing Time) Friday, July 19, 2002

Analysis: China's Export Growth Likely to Reach 8 Percent

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China's exports for the first six months of this year realized an unexpected 14.1 percent growth, reaching 142.06 billion US dollars, according to figures released by the General Administration of Customs.

Foreign trade analysts here said the growth rate of exports for the whole year is expected to be no less than 8 percent, much higher than the 5-percent prediction by some analysts earlier this year.

Affected by the slowdown of the world economy last year, China's export growth declined in the latter half of 2001.

However the performance of China's foreign trade in the first six months was much better than expected. Foreign trade turnover hit 270.71 billion US dollars, up 12.3 percent. Besides exports, imports also rose, realized a 10.4-percent growth to reach 128.65 billion US dollars.

"Although there are still many uncertain factors in the world economy, recovery is certain now," said Li Yushi, vice-president of the Chinese Academy of International Trade and Economic Cooperation, during an interview with Xinhua. "It is entirely possible for China to have an 8 percent export growth this year."

Causes of China's exports growth

The better-than-expected trade performance was mainly because of the unexpected world economic recovery, stronger government support of exports, and the contribution from more overseas-invested firms and private firms, analysts say.

Li said growing demand in the world market due to a better-than-expected economic recovery in the United States and other areas are the leading cause of China's growth in exports.

As the mover of the world economy, the US economy managed a 1.7percent growth in the final quarter of last year, and was followed by a 5.8 percent growth of gross domestic product (GDP) in the first quarter this year.

In addition, the economic recovery in the European Union is accelerating.

The devaluation of the Japanese yen eased the recession that has hit Japan for years, Li said, adding that the Republic of Korea and Thailand, two other important importers of Chinese exports, also show signs of economic recovery.

As a result, China's exports to the United States grew 19.3 percent from January to June, to the EU 6.1 percent, and to Japan,1.1 percent.

The vice-president of China's most prestigious trade research organization said China's entry into the World Trade Organization actually had little effect on the growth of China's exports. "China's membership of the WTO did not affect its exports much in the first year," he said. "Although China was faced with a number of trade protectionism cases, the number was no bigger than in the past."

Li also attributed China's export growth to government support. China raised the rate of the export tax drawback last year, and paid the drawback money quicker. The measures were implemented swiftly in some coastal areas, traditionally the leading sources of China export commodities.

Overseas-invested companies, particularly transnational companies, have increased their investment in China following the country's entry into the WTO. The volume of these companies exports accounted for 51.7 percent of all China's exports. It was the first time that overseas-invested firms had contributed more than half of China's exports.

In addition, the exports of China's private companies, although comparatively lower, are growing strongly.

The export of China's electronic products and machinery, whose competitive edge has been sharpened over the years, is now a pillar for China's exports growth. The exports of electronic products and machinery grew 24 percent in the first six months, and accounted for 47.9 percent of China's total exports.

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