China's foreign trade will continuestruggling due to the severe contraction of the international market and thegovernment will adopt more policies to facilitate the country's exports andimports, according to a press release from the Ministry of Commerce on April15.

Yao Jian, the spokesperson forthe Commerce Ministry, warned that China's export would be negativelyaffected by the external demand downturn, trade financing problem andprotectionism in international markets. "Foreign trade is China's hardesthit sector in the financial crisis," he said.

The imports for the country'sprocessing trade plummeted 35.7 percent in the first quarter of the year. Thedecrease is 8.1 percentage points higher than that of general trade. Asprocessing trade contributes most of China's exports, the downturn inthe imports for the processing trade is an important signal of the severereality of China'sexports.

The WTO has forecasted a 9percent decline of world trade in 2009, the biggest drop since World War II,and estimated at least 100 billion USD of trade financing shortage.

However, "we should beconfident about China'sforeign trade if we consider the current global context," said Yao.

He believes that China'slabor-intensive products, telecom equipment and general machineries will beparticularly competitive on the international market.

Customs statistics show that China'slabor-intensive export enjoyed a robust growth in March. In March exports ofapparel, furniture, shoes and bags all increased year-on-year by a largemargin.

Yao thinks that the investment spree oninfrastructure in many countries will bring many business opportunities forChinese suppliers of telecom equipment and machinery.

More than half of China's exportsare from machinery and electronic products. Such exports went down by 18.8percent in March from the same month of last year, but up by 25.6 percent overFebruary.

Yao disclosed that more support on financingand insurance would be given to the export of large equipment, which reliesheavily on trade financing.

He added that measures would betaken to help small and medium sized enterprises (SMEs) expand their businesson the international market. "Support for SMEs is far from enough" herecognized, promising better service from the Commerce Ministry to help SMEswith their marketing for overseas markets.

He also hopes that the 105thtrade fair under way would be an opportunity for SMEs to get more orders fromthe overseas markets.

China's steel industry is facingincreasing trade remedy measures. On April 8, the European Commission announcedits decision of imposing temporary anti-dumping duties on seamless steel pipesfrom China.The same day the USsteel enterprises and gilds filed an application for anti-dumping andcountervailing investigations into steel pipe imported from China used inoil and gas drilling.

According to Yao, Chinaexported about 3.2 billion USD of such products to the US in 2008 and China's exportsof steel products dropped by 55 percent in the first three months of the year.The Ministry of Commerce has raised the issue to the US Embassy in Beijing and an officialdelegation will go to the USfor further talks.

"We hope that the US governmentwould act cautiously on the case; otherwise it will have a serious negativeimpact on bilateral economic and trade relations," Yao said, warning that China wouldtake "proper reactions" according to the development of the case.

The WTO also warned that mountingprotectionism had deteriorated the global trade contraction which in turn wouldprolong the economic recession.

Yao reiterated China's policy consistency on itsopening-up policy as a basic national strategy and its opposition toprotectionism.

He added that China wouldencourage imports of advanced technologies, environmental protection products,key components and parts as well as commodities to achieve trade balance.

Customs data shows that China's totalforeign trade was down by 24.9 percent year on year in the first quarter ofthis year. But there are signs of improvement in March, when the downturn oftotal foreign trade, exports and imports all slowed and the import prices roseby 2.7 percent over the previous month.

By People's DailyOnline

13:55, April 16, 2009

Source:english.people.com.cn