China's Import Growth Seen from an Asia-Europe Perspective: Comment

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Last updated at: (Beijing Time) Friday, July 25, 2003

China's Import Growth Seen from an Asia-Europe Perspective: Comment

Asia and Europe are two important continents in today's world economy, and China keeps close economic and trade ties with most Asia-Europe Meeting (ASEM) members.

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Asia and Europe are two important continents in today's world economy, and China keeps close economic and trade ties with most Asia-Europe Meeting (ASEM) members. Among China's top 10 trade partners, four are ASEM members, namely, Japan, EU, the ASEAN and the ROK, taking the first, third, fifth and sixth places respectively. China's trade volume with ASEM members approached US$ 287.5 billion last year, achieving a yearly growth of almost 19 percent and accounting for over 46 percent of the nation's total. In terms of bilateral trade, China's trade with Japan, EU, ASEAM and ROK grew rapidly at a pace of 36-44 percent in the first half of this year. Viewed from China's imports alone, the nation's total import value in the first six months amounted to US$185.8 billion, a considerable amount of which came from Asia-Europe regions, up 44.5 percent, or 10.5 percentage points higher than the growth of exports, and China's imports growth from Japan, EU, ASEAN and ROK climbed to 46 percent, 39 percent, 55.5 percent and 53.7 percent respectively.

Data from the National Bureau of Statistics show that China is now in a high import growth period. This is because, firstly, to honor its WTO commitments, China has slashed its tariff level, and further cut it to 11 percent as of January 1, 2003; another 90 information products realized zero tariff and all these stimulated import growth; secondly, as the national economy operating continuously at a high level, investment and high industrial growth provided increased impetus and update of the consumption pattern also boosted the demand for foreign goods; thirdly, neighboring countries and regions are shifting their manufacturing links to China on a large scale, and imports from these countries and regions increase accordingly.

In the first quarter of this year, China's foreign trade deficits, in existence for sometime, drew much concern. In fact, in a macro perspective deficit in a particular quarter or period is normal and at the current stage China's main imports are resources in short supply at home, raw and semi-processed materials and advanced foreign technological equipment. The rapid growth of the national economy has brought high rise in imports, while the structure of imported commodities has in return provided great support for the development of the national economy.

A point that cannot be neglected is that China's fast-rising imports have not only injected fresh vigor into its trade partners to help them emerge from economic depression and bring about economic growth, but have also contributed to the slow recovery of the world economy. China's aim to have quadrupled GDP by 2020, first of all, means quadrupling its market scale. Presently, the nation's market scale has been in the front ranks of the world and tremendous changes have taken place in the clothing, food, housing and transportation-every aspect of the life of urban and rural residents, with new flash-points of consumption appearing one after another; the unity and transparency of economic and trade policies have been greatly enhanced and the openness of markets has been deepening, all these have brought enormous business opportunities to world countries including ASEM members.

From 1998 to 2002 China's import of goods totaled US$1069.8 billion and the value of this year's imports is estimated to approach US$350 billion. Based on such a speed, the volume of the nation's imports would surpass US$1 trillion within three years, and reach US$1 trillion within two years by 2010. Such a big import anticipation will, on the one hand, raise the living standards of the Chinese people and, on the other hand, greatly benefit the Asia-Europe region and the whole world.

Liberalization and facilitation of trade and investment have always been a main theme of the ASEM Economic Ministers' Meeting (EMM), as well as a direction to which China has given impetus. Presently, as economic benefits have increasingly deepened the interdependence of various countries, China's economic growth rate, market potential and bright trade-investment prospects have an irresistible appeal to both developed and developing countries. On the principle of reciprocity and mutual benefit and striving for a "win, win" result, a positive choice of China is to conduct cooperation with ASEM members and its trade partners worldwide on a larger scale and in more fields, as well as create a relaxed and foreseeable trade environment for itself and others, into which naturally included the role it plays in increasing imports.

By PD Online Staff Member Li Heng

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