China became one of the major victims of trade protectionism in
the past nine months or so, suffering from a wide range of trade
barriers including anti-dumping, safeguard measures, subsidies and
countervailing measures and special safeguard measures.
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According to the China's Foreign Trade Report (fall, 2005) released
on Friday by the Ministry
of Commerce, in the first three quarters of this year, China
incurred trade frictions involving US$8.9 billion, a growth of more
than 700 percent over the year-earlier level.
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"The situation will likely remain unchanged in 2006, as China's
trade surplus will hit US$90 billion for the whole year and some
major economies continued to pursue trade protectionism policy,
using 'high unemployment ratio' as an excuse," said Li Rongcan,
deputy head of the planning and finance department of the commerce
ministry.
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Other experts noted that amid the rampant increment in trade
frictions, focus of conflicts shifted gradually from trade in goods
to China's exchange rate and taxation policies and economic
structure.
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"Though domestic demand waned and imports somehow slackened
accordingly, due largely to macro economic control, in the first
half of the year, it is totally wrong to consider the Chinese
government stepped in foreign trade with administrative
instruments," said Li Yushi, vice president of the Research
Institute of International Trade and Economic Cooperation.
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He held, "China is not in pursuit of trade surplus, nor
implementing the so-called 'mercantilism'. On the contrary, the
continuous growth in trade surplus has become one of major concerns
of the Chinese government, as it helped increase the nation's
foreign exchange reserve to US$760 billion, which has begun to
affect the national economy."
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Many economists attributed the fast growth in China's external
trade mainly to rapid global economic growth and robust demand on
the world market.
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"By contrast, China's domestic market was oversupplied generally,
compelling traders to turn to international markets and thus
boosting export," Li Yushi said.
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Another factor behind the fast growth in exports lied in
manufacturing capabilities accumulated by more foreign direct
investment over the past few years, Li pointed out.
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Take the textile sector. Latest survey showed that some US textile
businesses pumped scores of millions US dollars into China, and
most of their products were sold to international markets,
according to Cao Xinyu, vice chairman of China chamber of commerce
for textile import and export.
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"Though the prospect of Sino-US textile trade remains unclear,
there is no evidence that these businesses will stop expanding
production," Cao said.
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In sharp contrast with fast export growth, import suffered an
unusual drastic decline in China.
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Li said, "This was largely because of decreasing arrivals of raw
materials and equipment, particularly equipment imported by foreign
investors as form of investment, which went down 11.7 percent
year-on-year in the first nine months."
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Nonetheless, China's macro economic control measures have been
gradually absorbed by the domestic market, demand at home will
likely gain ground.
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Customs sources said that in September China's import volume rose
23.5 percent over the same month of last year to US$62.6 billion,
while the export volume climbed up 25.9 percent to US$70.2 billion,
slower than the 32.1 percent growth in August. The trade surplus
adjusted downward from the US$10 billion in August and US$10.5
billion in July to US$7.6 billion in September.
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"Currently, import is totally businesses' activity. There has been
almost no room for the Government to intervene by administrative
means after China entered the World Trade Organization. Along with
a recovery in investment at home, China's trade surplus in 2006
will probably be lower than the estimated US$90 billion for the
current year," Li Yushi said.
(Xinhua News Agency October 30, 2005)