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China's Foreign Trade Steps out of Asian Financial Crisis Shadow
In the first half of this year, China's foreign trade grew rapidly. The total value of imports and exports was US$216.6 billion, up 37.3%. If there are no big surprises, this year's foreign trade can register double-digit growth, indicating that China's foreign trade has stepped out of the shadow of Asian financial crisis and is back on track for high-speed growth.
The Asian financial crisis in the second half of 1997 had a tremendous impact on China's foreign trade, particularly on export. China's exports, which had grown for twenty years, stagnated for the first time in 1998.
The CPC Central Committee and State Council recognized the great importance of foreign trade. They repeatedly emphasized that while expanding domestic demand, every means should be taken to increase exports and develop international market. Through the efforts of the entire country, China's exports stopped declining last July and began to pick back up.
Since this year, China's foreign trade rebounded sharply, the total value of import and export during the first quarter increased 40% compared to the same period of last year. Export grew by 39% while import roses by 41%. This growth was maintained during the second quarter.
China's strong foreign trade in the first half can be attributed to both external and internal factors. The first reason is the improvement of the global economy and strong demand from international market. Some nations hit hard by the Asian financial crisis have gradually recovered, facilitating China's increase in export. From domestic perspective, the sustained economic growth and sufficient supply of export goods provided a material basis for export and demand for import. The first half witnessed an especially quick growth of mechanical and electrical products and high-tech products, suggesting that the adjustment in export goods structure and "promoting trade through technology" strategy is paying off.
Compared to the early days of China's economic reforms, foreign trade holds a more important position in China's economic development. Export occupies about 20% of the GDP, or in other words, one-fifth of China's GDP is achieved by export. The growth of foreign trade plays a significant role in nation's economic growth, employment, fiscal revenue and international trade balance.
The role of China's foreign trade in pulling up the nation's economy has become increasingly obvious. Since the end of 1997, the economy gradually shrank due to the slow growth of foreign trade caused by the Asian financial crisis. During the first half of this year, China's export increased by US$31.5 billion dollars. It's role in pulling up China's economic growth cannot be underestimated.
Acceleration of integrating the global economy integration and technical progress drive the development of the global economy. According to the projection of international institutions, the growth rate of the global economy this year is expected to hit 4.2% and international trade is forecasted to rise by 7%. All these trends provide a greater future for the development of China's foreign trade.
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