Prospects of China's Foreign Trade Not Optimistic in Second Half Year

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Last updated at: (Beijing Time) Friday, August 02, 2002

Prospects of China's Foreign Trade Not Optimistic in Second Half Year

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Gao Yan, spokeswoman for the Ministry of Foreign Trade and Economic Cooperation, recently indicated China made more remarkable achievements than expected in the first half of this year, particularly in the areas of exportation and absorption of foreign investments. Sources revealed that in the same period, the total value of import and export was worth US$ 270.71 billion, an increase of 12.3 percent compared with the corresponding period last year.

However, China's foreign trade in the second half year is not optimistic. That is mainly due to the unclear economic development tendency. The United States, the world leading economic power, still faces many uncertain factors in spite of its short-term pickup at the beginning of this year.

Meanwhile, the shadow of the terrorist assault and the attack on Iraq, which will be launched at any time, will cause far-reaching impacts to the US economic development. Under such circumstance, the EU and Japan also suffer economic slump. In the US backyard, the Latin American countries will even face the possibility of a recurrence of financial crisis because an alleviation of Argentinean economic crisis has been delayed.

In such case, the world trade protectionism is bound to rear its head. Owing to the excellent situation of its export, China would undoubtedly sustain the greatest impacts in future world trade war. Although the WTO is initiating free trade, however, due to the "dominant position" of the United States and other countries in this organization, world trade rules and adjudication made by the WTO are invariably and largely in favor of the developed countries. Such being the case, China, as a new WTO member, must learn to skillfully use these rules to protect its own interests.

However, China also possesses its own advantages---accelerating economic growth and a huge market of 13 billion people. Currently these advantages help attract large amounts of foreign investments to China, which not only bring capital, technologies and management experiences but also stimulate export.

In addition, the devaluation of the US dollar is favorable for China's foreign trade. The devaluation will strengthen China's price competitiveness in the world market because, to some extent, the RMB is hooked up with the US dollar.

By PD Online Staff Yang Ruoqian

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