China’s total foreign trade volume is currently estimated to have reached almost USD 3 trillion in 2010, a historic high, yet the nation’s exports are likely to come up against more trade barriers as the world economic struggles to stage a bullish recovery, according to the Ministry of Commerce. Compared with 2009, the nation’s foreign trade growth in 2010 represents a rise of over 30 percent, well above the global average level of 11.4 percentage points.
At the same time, China’s domestic economic growth and domestic demand expansion led to a growing demand for imports and exports; while a rapid increase in international commodity prices will likely constrain commodity import growth to more rational levels.
Meanwhile, in the wake of rapid growth in foreign trade imports, China’s trade surplus continued to decline. According to customs statistics, China’s foreign trade surplus amounted to USD 170.412bn from January to November, a drop of 4.2 percent as compared with the same period in 2009, and a decrease of 33.4 percent from the same 2008 period. A declining surplus is attributed mainly to a significant rise in the rate of import growth over export growth. China’s exports grew 33 percent to USD 1.42 trillion from January to November, with imports up 40.3 percent to USD 1.253 trillion.
In its major trading partners, in addition to the European Union (EU), the nation’s import growth rate from the United States, Japan, South Korea and ASEAN are significantly higher than China’s export growth rate to these countries and regions. This shows that China has taken pragmatic, substantial moves to promote the balanced growth of global trade. China’s marked import growth has become a vital, important force to drive the world economy out of an impasse. In a third trade policy review of China in May, the World Trade Organization (WTO) highly appreciated its adherence to import expansion.
As a matter of cause, China’s higher trade surplus was mainly driven by a rapid import growth. In a foreseeable future, however, it will remain increasingly difficult to offset trade surplus with import growth. And so a large surplus or imbalance will remain a cause for trade frictions against China.
Nevertheless, the distribution of China’s export destination countries has not changed much. The EU remains China’s largest export market from January to November 2010, and the country’s exports to the three major economies, namely, the U.S., Europe and Japan markets, accounted for 45.5 percent of China’s total exports. If China’s export flow through Hong Kong is included, then the developed countries are still China’s major export markets.
This also indicates from a side aspect the need to accelerate the pace of change in China’s foreign trade development model and, only in this way, can China boost the further implementation of exports market diversification strategy in an effort to disperse or diffuse its export risks.
What especially needs alert is that a rapid recovery of foreign trade situation and export situation in particular is likely to slow down the pace of foreign trade shift and restructuring. What this means is China intends to capitalize on the readjustment of global economy and the new round of technological innovation and press ahead with changes in the foreign trade development strategy and strategic transfer of the entire economy.
