Related Event: China's Economy 2005
Related Story: Trade Surplus to Reach US$90 bln
China's foreign trade growth will suffer a slowdown next year after a possible record surplus this year, the Ministry of Commerce said on Monday.
Foreign-trade volume is tipped to increase by about 15 per cent to US$1.6 trillion from an expected US$1.4 trillion in 2005.
Growth was 35.7 per cent in 2004, and is forecast at 21 per cent for this year.
The slowdown in foreign trade will help ease the government's concern on the impact of a high trade surplus on the currency issue and trade disputes.
The easing of growth next year will be a result of the large base this year and rising trade tensions, said Li Rongcan, a ministry official, when releasing China's autumn foreign trade report, jointly drafted by the ministry and the Chinese Academy of International Trade & Economic Co-operation.
Foreign trade volume this year is expected to reach US$1.4 trillion, up 21 per cent year-on-year. The trade surplus is forecast at a record high of US$90 billion, the report said.
Total exports this year are estimated at US$746 billion, a rise of 26 per cent year-on-year, while imports are expected to surge 18 per cent to reach US$655 billion.
Dramatic falls in imports of raw materials and machinery equipment were the result of effective measures to rein in runaway growth in some sectors.
Imports of steel products dropped by 3.93 million tons in the first three quarters, while whole-set equipment decreased by more than 4 per cent.
"Though domestic demand waned and imports slackened in the first half, due largely to macro-economic controls, it is totally wrong to consider the Chinese Government influenced foreign trade with administrative instruments," said Li Yushi, vice-president of the Chinese Academy of International Trade and Economic Co-operation.
"China is not in pursuit of a trade surplus. On the contrary, the continuous growth in trade surpluses has become one of the major concerns of the government, as it helped increase China's foreign exchange reserves to US$760 billion, which has begun to affect the national economy," Li Yushi said.
The State Administration of Foreign Exchange also said yesterday that China's first-half current-account surplus widened almost eightfold to US$67.3 billion from a year earlier as exports surged.
Li Rongcan said China's export growth will be slower as it is the target of an increasing number of trade disputes.
China is one of the major victims of trade protectionism this year, suffering from a wide range of trade barriers including anti-dumping, safeguard, countervailing and special safeguard measures as well as subsidies.
The report said that in the first three quarters of this year, foreign complaints and curbs on trade affected US$8.9 billion worth of exports, a 700 per cent growth year-on-year. "China is the biggest victim of trade protectionism and the situation is likely to remain unchanged in 2006, as some major economies will continue to pursue a trade protectionism policy, using high unemployment rates as an excuse," said Li Rongcan.