China Releases Report on Foreign Trade Situation (Fall 2012)
Oct. 30 – China’s Ministry of Commerce (MOC) released the “Report on China’s Foreign Trade Situation (Fall 2012)” on October 26, which reviews the performance of China’s foreign trade in the first three quarters of 2012, as well as predicts the trends thereof for the fourth quarter of 2012 and going into 2013. Key information extracted from the report can be found below.
Performance in the first three quarters
During the first three quarters of 2012, the total amount of imports and exports posted a 6.2 percent year-on-year increase, reaching US$2.84 trillion. Among which:
- Exports amounted to US$1.495 trillion, up 7.4 percent
- Imports amounted to US$1.347 trillion, up 4.8 percent
- Trade surplus amounted to US$148.31 billion, up 39.1 percent
In September, both imports and exports reached a record high. Exports increased by 9.9 percent, much higher than the 2.7 percent seen in August, while imports rose by 2.4 percent, compared with the 2.6 decline in the August.
With the general slowdown of foreign trade in the world’s major economies, China’s share of global trade is expected to remain stable or rise slightly, and the country’s imports and exports in the fourth quarter 2012 are expected to continue the upward trends seen in September.
In 2013, the economic environment both at home and abroad facing China’s foreign trade development may be slightly better than that of 2012. However, it remains difficult for the country’s foreign trade to achieve sustained rapid growth like it has in previous years, as restraints to foreign trade recovery still exist.
From the international perspective, there is no sufficient impetus to drive global economic growth. The International Monetary Fund predicts that the global economy will rise 3.6 percent in 2013, lower than the 4 percent average growth rate seen over the decade preceding the outbreak of the current economic crisis. Furthermore, international trade will experience a 4.5 percent increase in 2013, which is also lower than the 6 percent average growth recorded over the decade preceding the economic crisis, according to the World Trade Organization.
From the domestic perspective, China’s export enterprises suffer from a lack of orders due to weak external demand. At the end of September this year, the new export orders index of the Manufacturing Purchasing Manager Index (PMI) had been under the 50-point benchmark for four consecutive months, and based on a survey conducted by the MOC, the export profit index of enterprises had been below the 100-point benchmark for five consecutive months by the end of September.
Moreover, the impact of trade friction on Chinese exports continues to increase. China is the world’s biggest victim of trade protectionism. According to the “World Trade Alert” program led by the UK Center for Economic and Policy Research (CEPR), from 2008 onwards, 40 percent of global trade protectionism measures have targeted the country. Besides, for the first three quarters of 2012, there have been 55 trade remedy investigations against products exported by China (a 38 percent increase) worth an estimated US$24.3 billion.
Confronted with a such complex and challenging environment, the MOC report concludes that China should continue to focus on stabilizing growth, adjusting its structure, and promoting balance. Meanwhile, efforts should be made to improve import policies, build more import promotion platforms, and boost the balanced development of foreign trade.
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