China slashes foreign trade target to 6% next year

Citing India and Vietnam as major competitors challenging its vast exports markets, China has down graded its foreign trade target to six per cent next year from this year’s 7.5 per cent this year.

“As other developing economies such as India and Vietnam pose a greater challenge for Chinese businesses in developed markets, especially in the field of low-end manufacturing, exporters in China will be encouraged to develop new competitive edges through building brands, overseas acquisition, better services, research centers and global sales networks,” Commerce Minister Gao Hucheng said.

Gao Hucheng said that the ministry’s main tasks next year will be stabilising external demand, improving the quality of high-end manufacturing and adjusting the industrial structure, state-run China Daily reported today.

China has set a growth target for foreign trade at 6 per cent for next year, down from about 7.5 per cent in 2014, the paper said.

Defending the slashing of the trade target, Ren Hongbin, executive vice-president of the Beijing-based Chinese Academy of International Trade and Economic Cooperation, (CAITEC) the Commerce Ministry’s think tank, said it is a prudent move amid a challenging external environment and growing efforts to expand domestic demand.

China’s export growth slowed in November while imports contracted, raising pressure on government to introduce more stimulus measures.

Even though the country’s exports rose by 4.7 per cent year-on-year to $211.6 billion in November, the growth rate decelerated compared with October’s 11.6 per cent and 15.3 per cent in September, figures released by China’s General Administration of Customs said.

As exports fell, the growth of China’s export driven economy has slipped to 7.3 per cent in the third quarter from a year earlier, and November’s weak manufacturing, factory and investment figures suggest the second largest economy may miss the official target of 7.5 per cent.

However, the think-tank forecast growth of 10 per cent next year for service exports, including engineering, construction, tourism, information and communication technologies, which have become new engines of growth for the Chinese economy over the past three years.

Gao said the development of the Silk Road Economic Belt and 21st Century Maritime Silk Road has enhanced partnerships with various African nations, and new free trade zones in Tianjin, Guangdong and Fujian will become growth points to enrich exports in 2015.

Gu Xuebin, a senior researcher at CAITEC, said the 6 per cent target for foreign trade growth can certainly be reached with flexible trade policies.

China is already the world’s biggest exporter but it is losing its advantage of cheap labour, and industrial upgrading demands improvement in workers’ productivity and skills”.

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