Trade volume to top US$1 trillion in 2004 (peopledaily.com.cn) Updated: 2004-05-03 11:24
Li Rongcan, deputy director of Planning and Finance Department of the
Ministry of Commerce, released on April 29 in Guangzhou Trade Fair the 2004
Spring version of China's Foreign Trade Situation Report, which predicts that
the total volume of China's import and export would approach or top US$1
trillion.
During the first quarter China's foreign trade continued to grow fast with
the total volume of import and export being US$239.8 billion a 38 percent up
year on year. Of it export was US$115.7 billion growing by 34 percent; import
was US$124.1 billion growing by 42 percent. In general the development
environment for China's foreign trade will continue to improve this year among
some unfavorable factors and uncertainty.
The report points out that in terms of export the world economy is growing
with increasing momentum and major international economic organizations and
institutions generally hold optimistic opinions of the world economic outlook.
According to IMF the world economy would grow by 4.6 percent reaching a new high
since three years ago. International trade would become brisker. According to
WTO the volume of world trade would grow by 7.5 percent, a 3 percentage up over
last year.
The problem of export tax rebate that has inflicted export development for
years has been solved. The scarcity of funds for export companies has been
alleviated. During the first quarter China has finished refunding export tax of
83.8 billion yuan (US$10.1 billion), a 177 percent up year on year. During last
year and the year before China attracted more than US$50 billion of foreign
direct investment two years in a row, thereby acquiring a strong export
production capability.
Reform of foreign trade system continues to push ahead. A large group of
collective and private enterprises suddenly rose as a new export growth sector.
For these reasons China's export still has space for fast growth. However, it
should be realized that the exchange rates of main currencies fluctuate
frequently; oil price is running as a high level; and terrorism still cast a
shadow. These have formed great threat to the steady growth of the world
economy. International trade protectionism spreads worldwide, which brings
damage to the orderly development of the world trade. China is particularly
harmed by it. China's inland has a strong demand for investment, which
continuously drives up raw material prices and the cost of export. These are
disadvantageous or uncertain factors that greatly hinder China's export growth.
In terms of import China has a fast growth and expanding scale, which is
partly due to the price hike on the international market and partly to the
stimulus of customs duty reduction, but basically it was caused by domestic
investment demand swelling and over-investment in some industries. Last year
China's domestic investment grew by 26 percent and the growth was accelerated
further during the first quarter, reaching 43 percent. According to past data
the year in which investment grows fast is the one in which import grows
rapidly. Since it is impossible to instantly ease the bottleneck effect, import
this year would continue to run at a high level. As macro-control measures taken
by the Chinese government are being put to effect domestic investment demand
would see a slowed-down growth and import growth would gradually subside. By how
much it is to subside depends on the force and effect of the macro-control
measures.
To summarize the above analysis China's yearly import & export volume is
expected to approach or top $1 trillion with a 17 percent increase, of which
export would reach $505 billion C up by 15 percent; import would reach US$495
billion up by 20 percent. Import growth would be 5 percentages higher than
export.
