Chinese Foreign Trade Maintains Rise

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Last updated at: (Beijing Time) Sunday, October 06, 2002

Chinese Foreign Trade Maintains Rise

China's foreign trade will continue to swell in line with economic growth in the remaining months of this year, officials and industry experts said Friday.

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China's foreign trade will continue to swell in line with economic growth in the remaining months of this year, officials and industry experts said Friday.

Statistics released recently have shown that the nation's overseas trade remains buoyant despite the global economic slowdown.

According to the General Administration of Customs (GAC), foreign trade reached US$383.5 billion in the first eight months of this year.

Exports in this period rose 18 per cent to US$200.7 billion while imports grew 15 per cent to US$182.8 billion.

GAC also revealed that China had a trade surplus of US$17.9 billion in the first eight months of this year compared with US$11.45 billion a year earlier.

Exports in August surged 25 per cent year-on-year to hit US$29.4 billion, while imports rose 23 per cent to US$27.2 billion.

"Exports are likely to hit a record monthly high of US$30 billion in September," GAC said in a statement.

"The figure for the whole year is expected to rise by 15 per cent from a year earlier."

A surge in exports of machinery and electronics accompanied with continued growth in exports of high-tech products was the main driving force behind the expansion in China's foreign trade, the statement said.

"If there are no economic slumps in the next few months, exports this year will grow by more than 10 per cent," said Li Yushi, deputy director of the Chinese Academy of International Trade and Co-operation under the Ministry of Foreign Trade and Economic Co-operation (MOFTEC).

The nation's sound economic development has laid the foundation for growth in exports, he said.

Experts forecast growth in the country's gross domestic product (GDP) this year to be around 7.4 per cent.

Government measures such as export tax rebates, improved government services, reform of administrative approval systems and a sound legal environment are all conducive to stimulating national export, Li said.

Industry experts believe China's entry into the World Trade Organization (WTO) has enabled Chinese products to be on an equal footing in international competition.

Because of continuing worries about the stability of the global economy following the September 11 terrorist attacks last year, China's stable political and economic situation has attracted increasing numbers of transnational companies to shift their manufacturing bases to the country.

Another reason for the nation's sustainable exports may lie in its export structure, Li said.

Most of China's exports currently consist of daily necessities such as textiles, garments and household electrical appliances.

"Even an economic recession will not have much effect on the demand for these kinds of goods," Li said.

"Exports have also been fuelled by the increasing participation and competitiveness of foreign and private firms."

Analysts suggested China should take advantage of WTO-related rules to adopt effective measures to fight against international trade protectionism.

In another development, China's foreign direct investment (FDI) will also surge in the following months, analysts said.

According to MOFTEC, actual use of FDI hit US$34.44 billion in the first eight months of the year, up 25.5 per cent on a year earlier.

Contractual FDI, an indicator of future trends, rose 42.4 per cent year-on-year between January and August to US$62.3 billion.

The actual use of foreign investment reached US$4.9 billion in August, compared with US$4.96 billion in July and US$3.23 billion a year earlier.

A total of 411,495 foreign-funded companies had been approved in China by August with contracted investment of US$807.6 billion and an actual volume of US$429.7 billion.

"The optimized business environment following China's WTO entry continues to be the main reason for increasing foreign investment," said Professor Lu Jinyong with the University of International Business and Economics.

He believed the adjustment of related government policies according to China's WTO commitments has widened the range for foreign investment. He cited the removal of tariff barriers, gradual opening of China's services sectors and the increasing attention paid to high-tech industries.

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