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Outlook for foreign trade to stay 'grim'

THE outlook for China's foreign trade will remain "grim" in the coming months, Commerce Minister Chen Deming said yesterday, as he confirmed that imports and exports fell again in February.

"Many problems in the United States financial system have yet to be exposed and financial difficulties are rising in Europe," Chen told a press conference at the National People's Congress. "So we still see quite a grim picture in the coming months."

Citing preliminary customs data, Chen said that foreign trade fell again in February, with a faster drop in the processing trade.

China's exports dived 17.5 percent in January compared to a year ago, much steeper than the 2.8-percent decline for December. Imports tumbled 43.1 percent in January, indicating flagging industrial demand. Some media reports had indicated an even larger drop in February exports. The February trade figures will be officially released as early as today.

Citing customs bureau's analysis, Chen said that exports declined at a faster pace in coastal areas than in inland regions, and mechanical and electrical products fell quicker than textiles and other consumer goods.

China has raised export tax rebates and pledged more financial support to exporters, mostly small and medium firms, to shore up weakening exports and maintain stable economic growth.

Premier Wen Jiabao said that the government is stepping up the pace.

"(We) will restore any export policy that is conducive to labor-intensive and export industries and scrap those adverse policies as soon as possible," Wen told NPC delegates from Zhejiang Province, a major base of export-oriented manufacturers, according to China National Radio.

Chen emphasized that China will exercise caution in providing export aid. The government will ensure that all measures do not violate the rules of the World Trade Organization, he said, while reiterating China's stand that trade protectionism wouldn't help the world economy.


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