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.

Strategically positioned in south-western China, Kunming is set to become the key regional hub connecting China and Southeast Asia. The planned railway network will help boost trade in the region and improve passenger connections between China and the ASEAN states. The China-ASEAN Free Trade Agreement (FTA) came into force in early 2010, making it the world’s third largest FTA in terms of trade volume.

Much of South-East Asia’s current rail network is generally in poor condition, and is not commonly used for freight transportation. China’s interest in regional rail network development is not difficult to understand; on one hand opening new efficient trade routes with neighbouring countries will boost China’s economy, particularly in the less developed western provinces in close proximity to SE Asia. Additionally, China wants to spread political influence in the region, and by contributing Chinese capital and high-speed rail technology, they can increase their sway in the region’s affairs.

Another key factor is potential access to the Indian Ocean through Myanmar, a possibility which could have huge strategic importance for China.

The proposed route will connect China, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia and Singapore. The completed network could stretch to as much as 14,000 km, with three main lines. The eastern line will run from Kunming through Vietnam, Cambodia and Malaysia to Singapore. The central line from Kunming will go through Laos, Thailand and Malaysia to Singapore Finally, the western line will stretch from Kunming through Dali, Ruili and Myanmar to Singapore.

Several of the countries involved already have existing rail networks which will be combined into the new network. Eventually a full circuit will be completed around the ASEAN-China region. Tourism will be boosted, but the most significant impact will be for cargo. The ADB estimates that high speed rail transportation will reduce freight transport costs in the region by as much as two-thirds when compared to freight transport by road and sea.

Major sections of the network will be completed by 2015, but it is unlikely that the whole network will be completed before 2020. China’s ambitious plans will inevitably meet some resistance as they carve new rail routes into the landscape of their South-East Asian neighbours. However, China’s offer of much-needed infrastructure investment, new rail technology and the potential economic benefits which will come from the new rail network, mean that it’s an offer which is difficult to refuse.

China’s ambitious plans have even led to speculation that a high-speed China-Europe route could be in the pipeline, but this doesn’t seem likely to happen anytime soon. As China has used its ‘soft-power’ approach to gain access to natural resources on the African continent through investment and new job creation, it looks like the same approach could work in South-East Asia.

As ports play an important role in export trade, Vietnam’s port infrastructure in under pressure to meet these needs, unfortunately in most cases Vietnam’s ports lack adequate capacity. Despite lacking modern and efficient port facilities, Vietnam’s port throughput quadrupled between 1999 and 2009, and looks set to continue growing at a rapid pace. Vietnam’s port infrastructure is currently ranked 97th out of 137 countries by the WEF.


Even the largest of Vietnam’s ports have struggled to keep pace with demand and the need for efficient deep-water ports in the country. Vietnamese ports have lacked sufficient draft-depth to accommodate the largest container vessels, this has meant that transhipment at deeper ports like Hong Kong and Singapore has often been necessary, significantly increasing the cost of shipping. This has significantly increased the cost of exporting from Vietnam. However, in early 2011 Vietnam’s first deep-water transhipment port, the Tan Cang International Terminal, was opened.

The volume of freight handled through Vietnamese ports could increase to as much as 1.1bn metric tonnes by 2020, from 172.1m tonnes in 2009. Current government plans could see USD 21bn invested in Vietnam’s port infrastructure this decade.

Currently, one of the most exciting areas in terms of port development is the Cai Mep – Thi Vai region in Southern Vietnam, close to HCM City. Ports under construction or recently completed in this region include Tan Cang International Container Terminal, SP-PSA International Terminal, Cai Mep International Terminal and Saigon International Terminal.

The need for large efficient ports and world-class cargo processing in Vietnam is clear, and current progress suggests further improvements to come. Without a doubt ports will play a pivotal role in Vietnam’s economic growth over the next ten years.

In 2010, national coal production and sales boomed. Rail lines accelerated coal transmission, with annual coal shipments totalling 2bn tons, an increase of 14.2 percent; main transit port shipments reached 560m tons of coal, an increase of 21.5 percent. By the end of the year, key stocks at power plants reached 56.07m tons of coal power plants, roughly enough for 15 days of standard usage.

In 2010 international coal market remained relatively weak leading to relatively low prices for the bulk of the year. Despite this, as the year wore on and the global economic climate improved prices ended the year on an upward swing. Fuelled by these low prices in the first three quarters of the year, power stations in the south of the country increased international coal procurements driving the increase of import volumes leading to a total net import volume of 146m tons, an increase of 40.9 percent.

China Coal Price Follows W shaped trend.

Extreme cold weather early in the year, coupled with a drought in the Southwest of the country which strained hydro-electric generation, forced coal prices up, with Qinhuangdao coal price reaching RMB 805 per 5500 kcal/ton. With temperatures rising in the second quarter after Spring Festival, coal demand fell accompanied by prices, reaching a low of RMB 675/ton in late March.

As Q2 progressed, industrial and mining production continued to recover with energy-intensive industries growing quickly, driving net energy demand growth. As the Southwest drought continued to drain hydropower production – a key component of the West-East power transmission program continued to lag well behind expected capacity. These two factors combined with efforts by power stations to bolster stocks in preparation for the summer peak led to a shorter than usual low season, driving prices of Qinhuangdao 5500 kcal up to RMB 760/ton. During the summer peaks, the rainy season boosted hydropower transmission easing prices own to RMB 720/ton.As of the end of October, the return of winter months once again drove prices up, reaching 807/ton by the end of November.

Winter continued to drive demand for heating reaching a national average thermal generating capacity 10.7bn in late December, a new record high, driving prices and reducing strategic reserves at power generating stations.

Prompted by this, the National Energy Board introduced measures to reduce hoarding and price speculation, forging longer term supply agreements. Introduction of these measures, ha by the end of December forced prices down RMB 775/ton – a decrease of RMB 30/ton over the December price.

In 2010, national electricity generating capacity expanded by 91.27m kilowatts; of which hydro-power constituted 16.61m kilowatts; thermal power generation constituted 58.76m kilowatts; nuclear power reached 1.74m; with wind-power accounting for 13.99m.

As of the end of 2010, the national total power installed capacity reached 960m kilowatts, of which hydropower accounted for 210m kilowatts; thermal power accounted for 700m kilowatts; nuclear power accounted for 10.8m kilowatts; with wind-power accounting for 31.07m kilowatts.

At the same time, total annual generating capacity reached 4.14 trillion kwh, up 13.3 percent over the previous year. The national average utilization hours of total power generation equipment reached 4660 hours, 114 hours more than last year. Among them, hydropower reached 3429 hours, 101 hours over the previous year; thermal power 5031 hours, increased 166 hours; Nuclear 7924 hours, increased 208 hours; wind power 2097 hours, increased by 20 hours.

It is estimated that total electricity consumption in 2010 totalled 4.19 trillion kwh, up 14.6 percent.

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China’s imports and exports to the United States are expected to maintain steady growth in 2011, but growth will fall compared with 2010; growth rate of imports and exports to the United States will be slightly lower than the total growth throughout the country. China’s total import and export value to the United States is expected to be about USD 464.5bn in 2011 an increase of 20.5 percent compared with the year before; export volume will be about USD 340bn, an increase of 20 percent compared with the year before; import volume will be about USD 124.5bn, an increase of 22 percent compared with the year before.

China’s imports and exports to the EU are expected to maintain steady growth in 2011, but growth will fall compared with 2010; the growth rate of imports and exports to the EU will be slightly lower than the total growth throughout the country. China’s total imports and exports to the EU are expected to be about USD 584.7bn, an increase of 21.9 percent compared with the year before; export volume will be about USD 376.6bn, an increase of 21 percent compared with the year before; import volume will be about USD 201.8 bn, an increase of 23.5 percent compared with the year before.

In 2011, China’s import and export situation is likely to be confronted with certain degree of uncertainty.
The following aspects should be particularly concerned about the impact on the import and export:

• The world economy as a whole will be in a moderate growth phase in 2011, due to the withdrawal of large-scale economic stimulus packages; this is likely to create some risk.
• World economic growth in 2011 will be lower than 2010, around 4.2 percent, which will affect China’s exports in 2011.
• China’s GDP growth will remain relatively high in 2011, with the growth rate of around 9.8 percent; business planning in “The 12th Five Year Plan” addresses the market expansion of both domestic demand and import; implementation of import promotion policies will effectively drive the development of China’s imports.
• In 2010, China’s import prices were high, while export prices recovered slowly, and trading conditions showed marked deterioration.
• In 2011, international bulk commodity prices will face greater rising pressure, and the trend for import prices is likely to continue, while China’s terms of trade may continue to deteriorate, which would have direct and indirect effects on the trade surplus.
• Pressure of RMB appreciation and the impact of import and export trade frictions should not be ignored.
• Overall, there will be more opportunities than challenges in China’s import and export development.

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The top five were Shanghai with its GDP at RMB 1.6872.42 trillion; Suzhou with RMB 916.891bn, Hangzhou with RMB 594.582bn, Wuxi with RMB 575.8bn, and Ningbo with RMB 512.582bn.
The report goes on to add that the economic performance of the YRD region in 2010 was greatly aided by the emergence of recovery within the global economy. The region’s industrial production continued to accelerate and its above-scale industrial output value was RMB 14.7392 trillion in 2010, an increase of 26 percent year on year.

The statistics show that in 2010, the average growth rate of the 16 Yangtze River Delta (YRD) cities’ GDP was 12.6 percent, with that of Jiaxing, Taizhou, Yangzhou, Zhenjiang and Suzhou exceeding 13 percent, topping the YRD.

The Yangtze River Delta (YRD) economic zone refers to 16 cities in Shanghai, southern Jiangsu, eastern and northern Zhejiang; Shanghai, Nanjing, Suzhou, Wuxi, Changzhou, Yangzhou, Zhenjiang, Nantong, Taizhou, Hangzhou, Ningbo, Huzhou, Jiaxing, Shaoxing, Zhoushan and Taizhou.

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