Chinese Gov’t Expects 10% Rise in Foreign Trade in 2012

March 7, 2012 Posted by China Briefing Reading Time: 3 minutes

Mar. 7 – During a press conference conducted in Beijing this morning on China’s international trade and domestic consumption, China’s Minister of Commerce Chen Deming expressed optimism towards the country’s target of 10 percent growth in foreign trade set in Premier Wen Jiabao’s 2012 Government Work Report. This comes despite a slowdown to 7 percent growth in the first two months of this year.

Chen attributed the slowdown in January and February to festival factors, but noted that China has been experiencing a decrease in trade surplus for some time now. In August 2011, China’s foreign trade increased around 27 percent year-on-year while December saw only a 12 percent year-on-year increase, according to Chen. He pointed to two major factors causing this reduced growth in foreign trade. On a global level, the aftershocks of the Global Financial Crisis and the European Debt Crisis are still influencing global consumption and, domestically, rising raw material prices and labor costs have directly led to the slowdown.

In order to achieve a 10 percent rise in foreign trade, Chen emphasized three measures.

Firstly: China will try to maintain its current foreign trade policies, which will help struggling exporters by reducing their tax burdens. Chen promised that if the government issues new policies, it would be incentives for foreign trade instead of restrictive measures.
Secondly: China will keep reforming its foreign trade structure and accelerating the transition of foreign trade development with a set of specific guidelines.
Thirdly: China needs to level its trade balance by encouraging more imports – including advanced technologies, equipment, raw materials and consumer goods. Moreover, Chen welcomed less-developed countries and developing countries to trade with China.

Chen also questioned U.S. criticism of China’s trade tactics, pointing out that China is doing a better job of controlling its trade balance than the United States.

China has experienced a decrease in trade surplus four years in a row, according to Chen. Last year, the total volume of foreign trade reached US$3.64 trillion. However, China has a surplus of US$150 billion, which is 2.1 percent of the country’s GDP while the United States has a trade deficit of US$737 billion, accounting for 4.8 percent of its GDP. The United States proposed that all G20 nations control trade balance within 4 percent. Based on the two countries’ trade statistics, China seems to be outperforming the United States so far in complying with this proposal.

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