China poised to seize world's export crown

09:47, January 11, 2010      

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There will be no question of China surpassing Germany as the world's largest exporter in 2009, based on the nation's higher-than-expected performance on exports in December, said analysts.

According to statistics released by Customs yesterday, China's exports in December surged by as much as 17 percent from a year earlier to $130 billion, which ended 13-months of negative annual growth that began in November 2008.

The December growth, far higher than previous forecasts, is expected to be sustained during the first quarter and to put pressure on the Chinese government to appreciate the yuan, analysts predicted.

In 2009, China's exports reached $1.2 trillion, down 16 percent year-on-year, and the trade surplus decreased by 34 percent to $196 billion, according to Customs.

"One thing is for sure, China is the leading exporter globally," said Zhang Yansheng, director of the Institute of Foreign Trade of the National Development and Reform Commission.

But Zhang believed there is much more room to "improve the export quality", as "a big proportion of the nation's exports are low value-added."

During the first half of 2009, China, for the first time since 2003, beat Germany by small margins as the leading exporter. Vice-Minister of Commerce Zhong Shan said in late December that China "will probably pick up the crown in 2009".

In the first 10 months of 2009, China exported commodities worth $957 billion, $40 billion higher than Germany.

In December 2009, China's major exporting regions including the provinces of Guangdong, Jiangsu and Zhejiang and the municipality of Shanghai, posted double digit annual growth of 23, 17, 14 and 23 percent respectively.

Although everyone said December 2009 would be a turning point for China's exports, no analyst predicted the growth would record such high levels.

"The rebound is surprising, but the upward trend will be ongoing during the first quarter of 2010 given the economic recovery overseas," said Li Wei, economist from Standard Chartered Shanghai.

Standard Chartered predicted export growth for China will "range from 10 to 15 percent from January to March," he predicted.

Dong Xian'an from Industrial Securities agreed. "Our previous forecast is the same, but the figure is probably set to be higher," Dong said.

As exports continue to grow, China will be under "increasing pressure on yuan appreciation," and "more hot money is expected to flow into China", said Li.

But according to Zhao Xijun, deputy-director of the School of Finance with Renmin University of China, "fluctuation in foreign exchange rates must be avoided to stabilize both Chinese and global economic growth".

Source:China Daily
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