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 | Thursday, April 27, 2000, updated at 09:10(GMT+8) | ||||||||||||
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Exports Crucial to China's Economic Growth This Year: ReportThe accelerated GDP growth of China in the first quarter is largely due to surging foreign trade, local analysts have said.The Economic Research Institute under the State Development Planning Commission published a report in "China Securities", saying China's GDP this year will grow at a rate of 7.5 percent, up from the 7.1 percent in 1999. China's economic growth slowed down for almost six years in the wake of dealing with an overheated economy in the early 1990s and the Asian economic crisis. Signs of recovery were shown in the first quarter with GDP increasing to 8.1 percent, 1.3 percentage points higher than that of the fourth quarter last year. However, the rapid growth is not the result of a healthy domestic demand, but fueled by surging foreign trade, which jumped 40 percent year on year. China's economic growth has been dependent on foreign trade over the past 20 years. The average annual growth rate of foreign trade stood at 15.6 percent in the last two decades. Foreign trade accounted for 30-44 percent of China's GDP in recent years, and the figure reached 44.6 percent in the first quarter. Surging exports promoted technical upgrading and industrial restructuring by bringing in state-of-the-art equipment. The steady growth of foreign trade will be affected by uncertain global markets, according to the report. China has adopted a number of favorable policies to encourage exports such as tax rebates in the face of a weak global market. The rising prices of raw materials as well as stronger competition from foreign companies would require greater efforts in sustaining export growth. The International Monetary Fund (IMF) forecasts an annual global economic growth of 4.2 percent in 2000, supported by strong growth in the United States and Europe. In the meantime, IMF pointed out that the economic boom in U.S., based on a bullish stock market, poses somehow an uncertainty in the global economy. Analysts from the research institute said that economic growth in China should combine both strong domestic demand and exports.
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