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China's trade decline to continue in June, FDI ratio unchanged
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14:50, July 02, 2009

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Figures for June show that China's foreign trade still declined for the first six months of the year, with the slowdown pace in June moderating, said Chen Jian, vice minister of Commerce on July 2 in Beijing.

He did not release the data for June. Customs will announce that figure, he said.

China's foreign trade went down by 24.7 percent over the first five months of the year. In May, China's exports experienced the largest drop, 26.4 percent, in the seven months decline since November 2008.

Yao Jian, spokesperson for the Ministry of Commerce attributed the sharp fall to the shrinking demand in major economies. Imports of the EU, the US and Japan all dropped some 30 percent over the fist quarter of the year. And China's trade with those three top trading partners all plummeted.

Foreign direct investment had been down for eight months in May. But Chen said the ratio of FDI in China in the global total has so far remained unchanged.

Global capital flow has decreased due to the financial crisis, Chen noted. However, foreign investors will still find China the best choice with the country's stable political environment, long-term economic development prospect, massive potential of domestic market in the process of industrialization and urbanization, and the stimulus package to fight against the financial crisis.

New policies to stabilize and optimize FDI into China will be announced soon, he said, stressing that the policy adjustment was not for the decline, but for better use of the FDI for the long term.

The policy will give support to foreign investment which improves China's industrial restructuring, employment, regional balance, environmental protection and energy efficiency. It will also include rules on encouraging quality foreign-funded enterprises to be listed on the Chinese stock market.

The World Bank predicted recently that FDI into China would decline by 20 percent in 2009 to 130 billion USD, accounting for some 10 percent of the global total.

China actually used 34 billion USD of foreign investment over the first five months of the year, down by 20.4 percent year on year.

Chen added that China would continue to support Chinese enterprises going international. The Ministry of Commerce will work with other departments on more support policies on taxation, insurance, financing, forex, etc.

The biggest challenge for China's overseas venture, said Chen, was the lack of experience in international operation. "Only when the Chinese companies are strong enough," he said, "can they adapt to various environments."

In the first quarter of the year, China set up 445 companies on the overseas market, up by 6.8 percent year on year. Non-financial investment reached 3.7 billion USD.

By People's Daily Online



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