Ministry warns of export vulnerability
By Wang Yanlin |
July 21, 2010, Wednesday
|
Print Edition
Print Edition
China sounded a gloomy note yesterday about its export prospects, warning in particular that belt-tightening by deeply indebted European Union governments would dampen demand for the country's goods.
"The sovereign debt crisis has made many EU countries shift to fiscal austerity from fiscal expansion, which will greatly restrict consumption and investment growth in the EU," Yao Jian, a spokesman for the Ministry of Commerce, told a press conference yesterday.
Cheap, labor-intensive products would be less vulnerable to a fall in European demand than more expensive, discretionary goods, he added.
Spain, Italy, Germany and non-euro member Britain are among EU countries that are tightening their budgets after Greece had to be bailed out in April, raising a red flag about the sustainability of public finances across Europe.
In addition, Brazil, India and other emerging economies have started to tighten monetary policy, the ministry said.
"The room for the further growth of Chinese exports is limited," Yao said. "We are not allowed to be too positive over China's exports in the second half."
He added: "The sovereign debt crisis in Europe, the tightening policies around the world, rising producer prices and growing trade disputes are added to difficulties that exporters have to face after the global financial crisis."
As a result, the ministry would keep in place policies aimed at supporting external demand for Chinese goods, including retaining export tax rebates.
In a separate report by the State Information Center, a unit under the National Development and Reform Commission, China's top economic planner, it forecast that China's exports may increase 16.3 percent annually in the second half, moderating from the expansion of 35.2 percent in the first six months.
Commenting on the case of a domestic steel maker prevented from establishing a plant in the United States, Yao urged fair treatment for Chinese investors in foreign markets. He said a proposed investigation into the Anshan Iron and Steel Group's plan to establish a joint venture with a US partner in Mississippi was protectionism, and politicized a normal business deal.
"I hope the US can create a better investment environment for Chinese enterprises," Yao said.
Yao said the ministry would keep policies targeted and flexible, helping exporters overcome difficulties and reduce trade friction.
In a letter to Treasury Secretary Timothy Geithner early this month, 50 US congressmen said the proposed joint venture threatened American jobs and national security. They asked Washington to investigate.
Ansteel planned a 14 percent stake in the US$175 million joint venture with the Steel Development Co in Amory, Mississippi, which could create jobs, increase tax revenue and boost local suppliers, it said.
"The sovereign debt crisis has made many EU countries shift to fiscal austerity from fiscal expansion, which will greatly restrict consumption and investment growth in the EU," Yao Jian, a spokesman for the Ministry of Commerce, told a press conference yesterday.
Cheap, labor-intensive products would be less vulnerable to a fall in European demand than more expensive, discretionary goods, he added.
Spain, Italy, Germany and non-euro member Britain are among EU countries that are tightening their budgets after Greece had to be bailed out in April, raising a red flag about the sustainability of public finances across Europe.
In addition, Brazil, India and other emerging economies have started to tighten monetary policy, the ministry said.
"The room for the further growth of Chinese exports is limited," Yao said. "We are not allowed to be too positive over China's exports in the second half."
He added: "The sovereign debt crisis in Europe, the tightening policies around the world, rising producer prices and growing trade disputes are added to difficulties that exporters have to face after the global financial crisis."
As a result, the ministry would keep in place policies aimed at supporting external demand for Chinese goods, including retaining export tax rebates.
In a separate report by the State Information Center, a unit under the National Development and Reform Commission, China's top economic planner, it forecast that China's exports may increase 16.3 percent annually in the second half, moderating from the expansion of 35.2 percent in the first six months.
Commenting on the case of a domestic steel maker prevented from establishing a plant in the United States, Yao urged fair treatment for Chinese investors in foreign markets. He said a proposed investigation into the Anshan Iron and Steel Group's plan to establish a joint venture with a US partner in Mississippi was protectionism, and politicized a normal business deal.
"I hope the US can create a better investment environment for Chinese enterprises," Yao said.
Yao said the ministry would keep policies targeted and flexible, helping exporters overcome difficulties and reduce trade friction.
In a letter to Treasury Secretary Timothy Geithner early this month, 50 US congressmen said the proposed joint venture threatened American jobs and national security. They asked Washington to investigate.
Ansteel planned a 14 percent stake in the US$175 million joint venture with the Steel Development Co in Amory, Mississippi, which could create jobs, increase tax revenue and boost local suppliers, it said.
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