China's trade restrictions call for less dependence on exports
China will enforce tougher trade restrictions on processed and manufactured products on Nov. 22 , which will include an initial 804 categories, the Korea Trade-Investment Promotion said yesterday.
The move is expected to pressure Korea to reduce its dependence on manufactured goods exports and create more value-added products that can compete in the Chinese market, KOTRA officials said.
China began applying restrictions on processed and manufactured goods in January this year, one of a series of legal reforms made in response to a rapidly changing trade environment.
The expanded list includes prohibiting imports of land and aquatic animal products, such as bones and horn-cores of wild animals in imminent danger, powder and waste of corals, shells of mollusks and crustaceans.
Exports of quartz, marble (crude or roughly trimmed), disposable chopsticks (made of wood or bamboo), and furniture made with wood of imminent danger, such as rosewood are also included. For exports and imports, briquettes (and similar solid fuels manufactured from coal), natural gas (liquefied and gaseous state) and distilled water for human consumption are cited.
According to the KOTRA office in China, many companies there are feeling anxious about not being able to completely understand China's trade restriction measures. It said that some companies expect their earnings to suffer and are thus even considering moving their business to another country.
The trade agency advised that to survive long-term in China, businesses need to reduce their dependence on exports of manufactured goods and develop ways to produce value-added goods in the domestic market.
KOTRA said the efforts of both governments are needed in promoting exchange of information about China's policy trends.
Experts say China wants to reduce exports of manufactured goods as it faces a decline in natural resources and its environmental pollution problems worsen.
The country is aiming to foster high-technology industries and restructure underdeveloped industries. But from the global economic perspective, the world's most rapidly expanding economy is pressured to relieve the burden of an increase in trade surplus and foreign exchange reserves. China is also pressured to resolve issues of trade friction and the strengthening of the Chinese currency.
China's trade surplus reached $110 billion through September, topping last year's total, and economists project the gap will exceed $150 billion in 2006. Exports raised its foreign exchange reserves to almost $1 trillion, a record for any nation.
As China's central bank issues yuan to buy dollars and keep the exchange rate stable, it increases the amount of cash circulating in the banking system.
A stronger yuan, however, would help reduce the trade surplus by making imports cheaper while slowing exports. That, in turn, would reduce growth in the domestic money supply, experts say.
A stronger yuan could help boost consumption by steering economic growth away from investment and exports.
(sohjung@heraldm.com)
By Yoo Soh-jung
2006.11.13
koreaherald.co.kr |
