China's Foreign Trade Volume up 37.9 Percent

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Last updated at: (Beijing Time) Tuesday, August 12, 2003

China's Foreign Trade Volume up 37.9 Percent

China's foreign trade totaled 450.74 billion US dollars worth in the first seven months of this year,up 37.9 percent over the same period of last year, according to customs statistics released Sunday. Exports rose 33.4 percent to 228.41 billion dollars worth and imports rose 42.9 percent to 222.33 billion dollars worth, according to the General Administration of Customs.

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China's foreign trade weathered the SARS outbreak and continued robust growth in both exports and imports during the January-July period, customs statistics show.

China's foreign trade totalled US$450.74 billion in the first seven months of 2003 -- up 37.9 per cent over the same period last year. But experts believe the impact of SARS on China's foreign trade will gradually show up in the second half of the year, causing a slowdown in trade growth.

Exports rose 33.4 per cent to US$228.41 billion and imports increased by 42.9 per cent to US$222.33 billion from January to July.

The US$6.08 billion trade surplus for the January-July period beat many economists' expectations that the SARS outbreak in mid-April would put heavy pressure on China's exports.

The foreign trade volume in July registered a monthly record of US$74.62 billion, but Li Yushi, a senior foreign trade expert from the Chinese Academy of International Trade and Economic Co-operation, believes the long-term impact of the SARS epidemic has yet to surface in the foreign trade sector given the time lag between placing orders and delivering goods.

A group study by the academy predicts monthly export growth in the third and fourth quarters will decrease by 10 per cent and 5-8 per cent respectively compared with the first half, Li said. The sharp decrease in signed contracts and realized orders during the SARS outbreak was the main reason for the slowdown, he added.

Trade barriers that were deliberately erected by some countries during the period also increased export costs.

Strong economic measures should be taken to tackle the deferred negative impact of SARS on China's foreign trade and overseas economic co-operation, Li said. In fact, governments at all levels are expected to hold more export fairs and exhibitions and the central government has promised to accelerate payment of tax rebates to exporters.

Meanwhile, Minister of Commerce Lu Fuyuan has announced a shift in government policy, encouraging domestic companies to increase their imports. And according to Zhang Xiaoji, an expert from the State Council's Development and Research Centre, the fact that import growth outpaced that of exports is notable. "The policy turnaround is a result of the nation's ample foreign-exchange reserves and the government's desire to promote world economic growth,'' Zhang said.

Big tariff cuts since China's entry to the World Trade Organization (WTO) also contributed to the high increase in imports, said Zhang.

Lu forecast at the Fifth Asia-Europe Economic Ministers' Meeting hold in Dalian in Northeast China's Liaoning Province last month that China's imports over the next three years will be worth US$1 trillion, making it the world's second largest purchaser behind only the United States.

Lu indicated he is not at all worried about the over-40 per cent faster-than-expected growth in imports in the first half of this year, or a probable resulting trade deficit this year, which China has not seen since the 1997 Asian financial crisis.

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