Heinz, I see that China's trade minister is already predicting that export growth in China could slow this
coming year.
March 14, 2001
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Export Growth in China Could Slow
Amid Growing Woes in Japan, U.S.
By PETER WONACOTT
Staff Reporter of THE WALL STREET JOURNAL
BEIJING -- China's trade minister cautioned that blistering export growth would ease this year, reflecting Japan's troubles and a cooling U.S. economy.
Yet despite the threat of a slowdown, Minister of Foreign Trade and Economic Cooperation Shi Guangsheng said China would still achieve "substantial" trade growth over the next two years while maintaining foreign direct investment at around the $40 billion level. Strong exports are vital to China as its economy faces slack demand, high unemployment and an agenda of jarring reforms linked to membership in the World Trade Organization.
At a news conference, Mr. Shi offered figures that supported his upbeat forecast. China's exports grew 14.5% to $36.14 billion in the first two months, while imports rose 17.7% to $33.77 billion in the same period from a year earlier. Meanwhile, contracted foreign investment grew 47% in the January-February period over the same period a year earlier.
These figures will help China maintain steady growth despite troubles at home, economists say. Now in the fourth year of a massive spending program, the government has issued about $56 billion in special Treasury bonds to fund infrastructure projects to create jobs and spur consumption. With demand for China's goods expected to soften overseas, Beijing has been wary of tapering off the fiscal stimulus. "China has decided to continue this policy because the U.S. slowdown coupled with Japanese recession makes it extremely difficult to grow through trade," said a government economist involved in crafting China's five-year economic plan.
Still, most analysts predict that China's trade will slow from its unexpectedly explosive clip last year. In 2000, China's exports grew 27.8% while imports rose 35.8%. The pace this year is expected to be half as fast, even as the country pursues a "go global" strategy to open new markets overseas.
Mr. Shi also sought to dash speculation that China may want to put off WTO entry and the painful restructuring that membership in the rule-setting trade body implies for state enterprises and farms. "China's persistent stance and efforts to join the WTO remain unchanged," he said.
China has been negotiating on-and-off-again to join the body for 14 years. The last steps have been especially protracted as Beijing just missed nailing down an agreement at a meeting earlier this year in Geneva. In a reference to the spat with the U.S. over China's farm subsidies, Mr. Shi said that some WTO members have demands that go "beyond the reach of China as a developing country."
Economists say China has little to fear from a small delay. "I think foreign investors know China will enter WTO," says Shawn Xu, head of research for China International Capital Corp. in Beijing. "For multinationals targeting China, one or two years is bearable." |
