News Analysis: China's External Trade to Rebound in 2000

In the first quarter of this year, China's macro-economy saw rapid growth with the GDP rising 8.1 percent over the same period last year.

The growth momentum of China's national economy is closely related to the fast growth of the country imports and exports. Statistics show that in the first three months, import and export volume rose 40 percent over the same period of 1999, with export volume up 39 percent and import value growing 41 percent. Foreign investment in the country has also begun to increase again. In the first quarter, contracted foreign funds increased by 27 percent, indicating strong potential for the months ahead. Actual foreign investment dropped by 2.72 percent, but compared with the decline of over 10 percent in the first quarter of 1999, the drastic downward trend has been checked.

Since China began its reform and opening up in 1978, foreign trade has maintained rapid development, with annual growth rate of import and export volume reaching 15.6 percent, much higher than then annual growth rate of the national economy.

Foreign trade has played an increasingly important role in stimulating the growth of the national economy, and the development of foreign trade has directly affected this growth.

Since the end of 1997, China's macro-economy has shown a tendency to deflate, due to the effects of the Asian financial crisis. The growth of the country's external trade slowed down, and in 1998, China's exports rose merely 0.5 percent over the previous year.

Economic analysts noted that the recovery of external trade in the first quarter this year indicates a better economic situation for the entire year.

The acceleration of integration into the global economy has promoted scientific and technological progress, as well as the growth of world economy in general. It is estimated that the growth rate for the global economy this year will reach 3.5 percent, and the rate for international trade will be 6 percent. Continued economic growth in the United States is expected to stabilize economic growth in Europe and Asia, and expand trade. China continues to adopt positive financial policies to improve its investment environment while it expands exports with favorable factors such as the campaign to develop western China and the anticipated entry into the World Trade Organization (WTO). However, analysts also point out that there are still unstable factors in the world economy, such as fluctuations on the stock market in the United States and regional economic protectionism. China must prepare for entry into the WTO this year, while facing many readjustments to its economy and external trade. The country must also make efforts to overcome many difficulties that lie on the road ahead, the analysts said.



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