China official: Strengthen currency, diversity markets, raise quality
China’s export rate will moderate and go into a period of gradual decline, according to an official with the country’s National Bureau of Statistics.
In an article last week in state-run newspaper China Daily, Liang Da said exporters should realize that “China’s rapid rise in foreign trade may taper off.”
Through August, China’s global exports for the year were up 22.4 percent year-on-year to $937.7 billion, down from 25.7 percent growth in 2007. China’s exports to the United States increased 10.6 percent, down 6.1 percent from growth a year earlier. Shipments to Europe and Japan increased 26.3 percent (down 5 percent) and 15.6 percent (down 3.9 percent) year-on-year, Liang wrote.
He said that a 1 percent drop in U.S. GDP equates to a 4.75 percent drop in exports from China to the United States.
Liang also said the strengthening Chinese currency and rising imports prices for commodities were hurting exporters.
“As the renminbi has continued to appreciate, exporters have displayed prudence in accepting foreign orders since the latter half of 2007,” he wrote. “The value of the renminbi appreciated more than 6 percent in 2007. To prevent the risk of exchange rate fluctuations, many export enterprises changed long-term orders into short-term ones, and large orders into smaller ones. Global inflationary pressures pushed up the price of raw materials on the international market, which increased exporters’ production costs.”
Finally, Liang recommended a number of measures to “stimulate overseas demand” through turbulent times.
' “The government should strengthen its supervision of key export products and help exporters deal with their lack of current capital and fend off risks presented by exchange rate fluctuations.'
' Decelerate the pace of the renminbi’s appreciation to maintain export growth.
' Diversify the destinations of exported products. 'Increased exports to emerging markets like the Middle East, Russia and Latin America could help to mitigate the effect of declining exports to developed countries.'
' Gradually transfer labor from exporters to other sectors, which would 'relieve the heavy burden on domestic employment caused by the slowing growth of export businesses.'
' 'Improve the quality and added value of exported products and promote export-oriented industry’s transformation from being labor-intensive to a more capital- and technology-intensive structure,” he wrote. ' Eric Johnson
China official: Strengthen currency, diversity markets, raise quality
