China set to miss 10% trade target
Updated: 2012-11-29 11:16
By Wei Tian (China Daily)
China may miss the 10 percent growth target for its trade sector this year, but will see moderate recovery next year amid still sluggish external demand, China's top trade official said on Wednesday.
"Trade growth speed may be slower than the goal we set at the beginning of the year, but China's share of global trade will remain at a steady level, if not further expanded," said Commerce Minister Chen Deming.
Although Chen said a more precise estimate won't be ready until the entire year's trade data is released, he suggested the situation will improve in 2013, in which growth in the second half will also be faster than in the first.
Customs data showed that the nation's total trade volume grew 6.3 percent year-on-year in the first 10 months of 2012, in which exports increased by 7.8 percent, and imports grew by 4.6 percent, resulting in a trade surplus of $180.23 billion.
Despite the pessimistic figure, Chen said the structure of foreign trade has been optimized, with mechanical and electrical products, exports from central and western provinces, and exports to emerging markets all playing a bigger role.
"But there are still a lot of uncertainties," he added.
According to Chen, global trade volume is expected to grow by just 2.5 percent this year, 2.5 percentage points lower than the previous year and much lower than the average of 6 percent over the past 15 years.
Qiao Hong, chief economist for China at Morgan Stanley, said there should not be much optimism about external demand next year, as the ongoing eurozone crisis continues to have a negative impact.
Qiao estimated that the contribution of exports to GDP growth will be minus 0.4 percent this year, and it will fall even further in 2013 to lower than minus 0.5 percent.
"The years 2013 and 2014 will still be the darkest hour before the dawn," she said.
Qiao's views were echoed by Ha Jiming, vice-chairman for China at Goldman Sachs Group Inc, who said: "It is hard for China's exports to grow further unless customers on the moon buy our products."
Qiao said the largest employing sector in China would no longer be exporters, but the service industry.
"The current employment level of the service sector is just 20 percent, compared with 70 percent in the United States, so there is still huge room for development."
"Without doubt the growth rate of exports will be slower than that of GDP, " Ha said.
Chen said China contributed more than 20 percent to global economic expansion in 2011, and its imports in the year were worth $1.7 trillion.
Meanwhile, the weight of trade surplus in the country's total economic output has come down from 7.6 percent in 2007 to 2.1 percent in 2011, comfortable by global standards.
Judging from the economic cycle, the global economy will remain in a trough in the long term, Chen said. As a result, the global environment remains tough.
Since 2008, countries have issued 858 trade protection clauses, Chen said, citing statistics from the World Trade Organization.
"We hope that countries could abandon the immune practice, and agree to oppose all kinds of protectionism, and insist on opening up."