China May See Balanced Trade in 2012
Slowing exports to the EU and the U.S. coupled with growing Chinese demand could reduce China’s trade surplus to near zero in 2012, according to Wei Jianguo, secretary-general of the China Center for International Economic Exchange.
The rapid growth of China’s exports to emerging economies will only make up for about a third of the growth lost in exports to developed economies, said Wei on the sidelines of the 7th Beijing-Tokyo Forum.
“With exports declining next year and imports picking up, China may achieve a trade balance,” he said, forecasting that China’s trade surplus will plunge to less than $100 billion for 2011 from $183 billion last year.
“China’s exports to the EU will grow 13 to 15 percent at most, as opposed to 22 to 28 percent last year,” Wei said, blaming the decline on the ongoing debt crisis. The EU remains China’s biggest trade partner, ahead of the U.S. and Japan.
China’s trade surplus of $31.5 billion in July was the highest in two years. Wei dismissed it as a bump caused by exporters rushing to book sales orders before further yuan appreciation. On Aug 11 the yuan appreciated above 6.4 to the dollar for the first time since records have been kept. Wei expects the yuan to appreciate by 7 percent this year and 5 to 7 percent more in 2012.
China’s exporters are being hurt by surging raw material costs and growing trade protectionism around the world. Wei expects emerging economies to file more lawsuits against China’s exports.
On the other side of the trade balalnce, imports will continue to grow, in part due to support from several government ministries jointly pushing import stimulus measures in key categories, especially those that contribute to a green economy, Wei said.
China will be cutting import duties, including on luxury goods, to stimulate consumption, Ministry of Commerce spokesman Yao Jian had said in June.
China’s overall trade volume of $318.9 billion in July represents a 21.5 percent year-on-year increase while import volume jumped 22.9 percent year-on-year to $143.6 billion.