Exports slowing down
With the combined effect of the slowing global economy and weakening demand in major markets, China’s rapid rise in foreign trade may taper off.
It is now fairly certain the export growth rate will moderate and is set for a gradual decline in the near future.
In the first eight months of this year, China’s exports were up 22.4% $937.7 billion, down from 25.7%in 2007. Notice these were rates of increase.
Imports jumped 30% to $785.7 billion, accelerating 10.4% year-on-year.
The country’s trade surplus decreased to $152 billion in the same period, shrinking $10 billion from last year.
As global economic problems mount, weakening demand in major markets such as the US has slowed China’s export growth.
It is estimated that every 1% decline in US GDP would cause a 4.75% drop in China’s export growth rate.
Fair to say foreign demand is on the wane and companies relying on exports were bearing the brunt of foreign imports.
As the renminbi has continued to appreciate, exporters have displayed prudence in accepting foreign orders since the latter half of 2007. The value of the renminbi appreciated more than 6% in 2007.
To cope with the deteriorating situation in foreign trade, a of number measures should be taken to stimulate overseas demand.
First, the government should strengthen its supervision of key export products and help exporters deal with their lack
Exports slowing down
of current capital and fend off risks presented by exchange rate fluctuations.
Second, the pace of the renminbi’s appreciation should be decelerated to maintain export growth.
Third, the destination of exported products must be diversified.
Fourth, gradually transferring labor from exporters to other sectors would relieve the heavy burden on domestic employment caused by the slowing growth of export businesses.
Fifth, it is of vital importance to improve the quality and added value of exported products and promote export-oriented industry’s transformation from being labor-intensive to a more capital- and technology-intensive structure.
The author is a senior expert of the National Bureau of Statistics. The full and very fair minded report is HERE.
Source: China Daily