China’s foreign trade on recovery track
BEIJING, April 10 (Xinhua) — China’s foreign trade growth continued to gain traction in the first quarter, indicating that the world’s second-largest economy is firming up.
China’s foreign trade — exports and imports combined — increased 13.4 percent year on year to 6.12 trillion U.S. dollars in the first three months, faster than the 8-percent goal set for the whole year, the General Administration of Customs (GAC) said Wednesday.
The trade surplus expanded to 43.07 billion U.S. dollars from 210 million U.S. dollars during the same period last year.
Zheng Yuesheng, spokesman for the GAC, attributed the higher-than-expected growth to an optimized policy environment for foreign trade.
Last year, China rolled out a raft of measures, including speeding up the export tax rebate process and reducing administrative costs for companies, to combat the influence of sluggish external demand and anemic domestic growth.
The effects of these policies, combined with China’s improving economy, point to slightly better trade prospects for this year, Zheng noted.
China’s foreign trade saw a mere 6.2-percent growth in 2012, falling short of the government’s goal of 10 percent for that year. The economy saw its slowest growth in 13 years in 2012, growing 7.8 percent.
After the economy began to show signs of recovery in the fourth quarter of last year, confidence gradually built among Chinese exporters and entrepreneurs, as evidenced by GAC data that showed the export managers’ index climbing for the fourth consecutive month in March.
In the first three months, two-way trade with the EU, China’s largest trade partner, went down 1.9 percent, a softer decline than the 3.7-percent drop logged in 2012, while that with the United States, its second-largest trade partner, rose 10.8 percent.
Trade with ASEAN (Association of Southeast Asian Nations) member countries increased 15.5 percent, although that with Japan shrank 10.7 percent during the period.
Zheng said that despite this year’s improving trade outlook, there is little possibility of a significant turnaround on the demand side from developed economies.
“Up until now, we have not seen signs of steady growth in external demand,” Zheng said, adding that other challenges, such as rising operational costs and exchange rates, increasing competition from other countries and rising protectionism, will complicate the country’s export growth.
Qu Hongbin, chief economist at HSBC, agreed with Zheng, saying that the fragile recovery in the U.S. and Europe indicates that the export outlook will remain relatively weak, although it will fare better than last year.
In March alone, China’s exports increased 10 percent year on year, narrowing from the 21.8-percent growth seen in February. Import growth bounced back to 14.1 percent following a 15.2-percent drop in the previous month, easing worries over weakness in internal demand.
The month saw a trade deficit of 880 million U.S. dollars, contrasting with the 15.25-billion-U.S.-dollar surplus seen in February.
While the latest data pointed to strengthening recovery in China, the strong performance has been doubted by some, as the government’s official statistics have not changed in tandem with those calculated by some of its trade partners.
Some reports indicate that companies may have misreported their exports to obtain tax rebates or to bypass the country’s capital controls to move money into the mainland, which could distort the trade data.
“The strong export data may indicate the inflow of speculative money through trade channels,” noted Liu Ligang, an economist with ANZ National Bank, Ltd.
Zheng explained the agency’s reporting method, saying every dollar that is listed in the customs report can be linked to a corresponding specific declaration form.
Liu said the data distortion may misguide policymakers and incur a negative impact on China’s foreign trade policies.
He advised customs to make improvements to its declaration system to let the data better reflect trade flow.
Source: http://news.xinhuanet.com/english/business/2013-04/10/c_132297756.htm