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Trade tipped to grow 8% despite global slowdown

By Jiang Wei (China Daily)
Updated: 2009-03-06 07:54

Trade tipped to grow 8% despite global slowdown

China pledged to maintain a steady growth in foreign trade this year amid sharp declines in external demand and a rise in international trade protectionism.

Premier Wen Jiabao yesterday said in his government work report at the opening of the annual session of the National People's Congress that the government will take a series of measures to help exporters address difficulties amid the global economic downturn and to ensure steady growth in foreign trade.

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Another report released by the country's top planner, the National Development and Reform Commission, yesterday predicted that the country's foreign trade volume would grow by 8 percent year-on-year this year, compared to the 17.8 percent growth seen last year. That means the value of foreign trade would touch $2.76 trillion this year.

Hit by the global credit crisis, Chinese exporters are suffering from declining demand and increasing defaults in deals.

A research by China Council for the Promotion of International Trade said Chinese companies' uncollectible debts in exports to the US market increased by two to three times last year, which made many exporters not confident enough to take further orders.

Premier Wen said a central government fund for trade development will be increased in order to encourage branded export products and support small- and medium-sized enterprises in expanding their international markets.

The government will expand the coverage of export credit insurance and encourage financial institutions to develop export credit to improve the country's financial services for imports and exports.

China will adjust the prohibited or restricted commodity categories of processing trade, and encourage the relocation of export processing industries from the eastern to the central and western regions.

However, some experts said the country's current policies on foreign trade are not enough to stimulate exports in such a gloomy market.

Zhang Xiaoji, an economist with the Development Research Center of the State Council, suggested that the government should further increase its tax rebate rates on exports.

Trade tipped to grow 8% despite global slowdown

The current measures to promote exports are not as strong as was done during the 1997 Asian financial crisis, he said.

He said the export sector contributes about 20 percent to the sales revenue of the country's manufacturing industry and provides 70 million to 80 million jobs. That means even a 10 percent drop in exports would affect up to 10 million jobs, he said.

 
 
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