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September 21, 2016

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China foreign trade remains under pressure

Source: Xinhua | September 21, 2016, Wednesday | Print Edition

CHINA’S foreign trade remains under considerable pressure as uncertainties mount, the Ministry of Commerce said yesterday, describing the current situation as “complicated and severe.”

Although trade data in August suggests an improving trend, China should not be “blindly optimistic” on its outlook, and further measures need to be taken to stabilize growth, MOC spokesman Shen Danyang said at a press conference.

Official data showed China’s foreign trade improved markedly in August due to stronger domestic and external demand. Yuan-denominated exports rose 5.9 percent year on year, while imports increased 10.8 percent.

But in the first eight months of the year, foreign trade was down 1.8 percent from a year earlier, with exports dropping 1 percent and imports falling 2.9 percent.

The weak performance comes against a backdrop of flagging trade growth worldwide. Last year was the fourth-consecutive year that global trade growth was below GDP growth, according to the World Trade Organization.

Alongside the prolonged downturn, protectionism is on the rise. Shen said that in the first eight months of the year, China was subject to 85 trade remedy probes, an increase of 49 percent year on year. The probes involved trade of US$10.32 billion, an increase of 94 percent year on year.

“Relentlessly resorting to trade remedies won’t help economic recovery,” Shen said. “China is willing to resolve the disputes through dialogue and cooperation to create a better environment for growth.”

In Hangzhou earlier this month, leaders of the G20 members, which account for 80 percent of the world’s trade, agreed to promote growth by formulating a strategy for global trade and creating guiding principles for global investment policy-making.

Criticism that China’s investment environment for foreign businesses had worsened was rejected by the MOC as biased.

Some foreign companies that rely on low costs and preferential policies are struggling, but this is because of intensified competition and slowing economic growth, not a worsening investment climate, Shen said.

Foreign companies that rely on preferential treatment to make easy money may feel the investment environment has deteriorated, but companies with foresight and competitiveness will feel the environment has improved, Shen added.

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