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China becomes No 3 trading
nation
BEIJING - China has
become the world's third-largest trading nation,
following the United States and Germany, as its
foreign trade value hit a record high of US$1
trillion in the first 11 months of 2004, and the
whole year's figure was expected to reach US$1.1
trillion. Simultaneously, Shanghai reportedly has
overtaken Rotterdam as the No 1 port in terms of
cargo throughput, handling 382 million metric tons
last year.
Figures from the General
Administration of Customs (GAC) showed that the
nation's foreign trade surplus reached US$21
billion, with exports soaring to US$529 billion.
Media reports on Tuesday said China's exports rose
33% in December, widening the trade surplus to an
all-time high. Overseas shipments reached $63.8
billion, pushing the trade gap to $11.1 billion,
according to the Ministry of Commerce website that
day. Imports also increased 25% from a year
earlier to a record $52.7 billion.
This
year's foreign trade is also expected to maintain
a similar growth rate, according to experts. Zhang
Hanlin, a researcher with the University of
International Business and Economics in Beijing,
said: "Exports will increase by 20-22%, and
imports will grow 25%, increasing overall foreign
trade by 20%." The global economy is likely to
grow by 3.5-4% this year, according to him.
China's major foreign trade partners are also
expected to witness economic growth. The European
Union will expand by 1.8%, Japan by 1.5-1.8%, and
the US and South Korea will grow by 3.5% and 5%.
Further tariff cuts are the second factor
set to boost China's foreign trade, Zhang said. IT
(information technology) products, home appliances
and textile products will remain the major driving
forces of China's exports. Zhang holds that the IT
sector, which experienced over 50% growth in
exports last year, has established a solid
production base in China. Fierce competition in
the sector means that increasing numbers of
foreign manufacturers will move their factories to
China, which will stimulate trade growth. And
though the textile industry faces an average
export tariff of 1.3%, which was implemented by
the GAC at the beginning of this year, its exports
will keep growing this year, Zhang predicted.
But he pointed out that there will be no
let-up in terms of trade disputes despite the
Chinese government's efforts to ease them. As for
imports, automobiles will experience an increase
because of the country's tariff cut last year from
37.6% down to 30% this year. Automobile imports
grew over 40% in recent years, with this trend set
to continue in 2005, Zhang said.
Experts
believe China should not over-emphasize its trade
volume, noting that the trade structure is more
important. The processing trade volume reached
$600 billion last year, accounting for more than
half the total. About 58% of exports came from the
processing trade, and it accounted for 50% of
imports. Zhang said: "China does not benefit
dramatically from large amounts of such foreign
trade. As more foreign firms move their
manufacturing bases to China, they also bring
materials from abroad and sell processed products
overseas. We need to find out who is making money
from this trade. The answer is not China, but
rather the multinationals."
Zhao Jinping,
an expert from the State Council Research and
Development Center, said China may be a large
trading nation, but it has yet to become a robust
trading nation. China Economic Times quoted him as
saying that China's foreign trade remains weak in
three respects: its trade does not exercise a
great influence on either the domestic or world
economy; exporters are weak in terms of their
research and development (R&D) capabilities
and brand development; domestic firms do not hold
the right to distribute profits in their hands.
Wang Linsheng, another expert from the
University of International Business and
Economics, agreed. "China lacks core technology
intellectual property rights, its own brands and a
complete marketing network," Wang pointed out. He
suggested the country should add value to its
exports by increasing investment in R&D,
acquiring core departments from foreign firms and
establishing joint ventures. China's exports
remain low-tech, with the general trade in
high-tech products accounting for very little of
overall trade. The government should establish a
system to support those exporting firms, he said.
Zhang Yansheng, director of the Institute
of International Economic Research under the
National Development and Reform Commission, said a
modern industrial economy needs to be established
based on mature technology and innovation. China
should promote its advanced sectors and develop
them into a driving force for foreign trade, he
said.
xxx China's foreign trade volume has
been galloping in recent years, from joining the
world's top 10 in 1997, to the top 7 in 2000, and
entering the top 4 in 2003. According to the
General Administrationn of Customs, the price of
imported products grew by 10.4% year-on-year in
the first three quarters of 2004, becoming the
highest figure in the past 10 years, while the
volume rose by 25.2%. These two factors lifted the
first three quarters' trade value by 38.2%.
Rapid global economic growth and rocketing
oil prices are the reasons for this growth.
Textile exports exceeded those of natural
resources, such as oil, for the first time. "It is
a pleasant phenomenon to see a drop in the export
of natural resources," Zhang said. Exports of
high-value-added products, such as machinery and
IT products, started to be the driving force of
trade in 2004.
The country's
macro-economic adjustment measures took effect in
terms of foreign trade, turning the $10 billion
trade deficit into a surplus of $10 billion by the
end of last October. Imports maintained a growth
rate of over 40% in the first four months of 2004.
Steel, cement, real estate and aluminum industries
have all experienced a much-needed cooling down.
Meanwhile, sectors like coal, electricity, oil and
transportation have received government support.
China imported 99.59 million tons of crude oil in
the first 10 months of last year, up 34.3%
year-on-year.
More exports to Korea
than US
The volume of Chinese imports
purchased by South Korea exceeded those that went
into the US for the first time last year, the
Korea Customs Service said Tuesday. On a
customs-cleared basis, China accounted for 13.2%,
or $29.6 billion, of South Korea's total imports,
but only made up 12.8%, or $28.8 billion of the
bulk of US imports, the office said. Last year,
South Korea posted the single largest trade
surplus with China at $20.2 billion, more than
three times the $5.7 billion registered in 2001.
(Asia
Pulse/XIC/Yonhap) |
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