10/04/2020
BEIJING (Reuters) – China will promote the sales of export products in domestic markets, as foreign trade faces unprecedented challenges due to the coronavirus pandemic, an assistant commerce minister said on Friday.
As the coronavirus spreads to almost all of China’s trading partners, the world’s second-largest economy is set to reach a grim milestone for full year growth, with the pace of expansion likely to be the slowest since the Cultural Revolution ended in 1976. And, the export sector is facing millions of job losses and factory shutdowns.
“Due to the rapid spread of the epidemic in the world, foreign demand has slumped and the biggest difficulty facing foreign trade companies is the plunge in orders,” said Ren Hongbin, the assistant minister at the Ministry of Commerce.
He said firms across the board have had their orders cancelled or delayed, and new orders are “very hard to sign”.
“The uncertainty about the pandemic has become the biggest uncertainty for foreign trade development.”
Forecasters expect China’s 2020 growth could be nearer the 2.0% mark – the slowest in over 40 years – due to the sweeping impact of the pandemic both at home and overseas. The economy grew 6.1% last year.
China’s overseas shipments fell 17.2% in January-February from the same period a year earlier, marking the steepest fall since February 2019. Imports sank 4% from a year earlier.
Among the government measures to support the sector, China is accelerating efforts to build online trade fairs and guiding exporters to work with e-commerce retailers for sales in domestic markets and coordinating with its trading partners to stabilise supply chains, said Ren.
The Canton Fair, China’s oldest and biggest trade fair due to take place online, will feature live-streaming services for participants, Li Xingqian, another commerce ministry official, told the same briefing. The fair was originally scheduled to begin on April 15, but was postponed due to the coronavirus outbreak.
China is willing to boost trade relations with other countries, including the United States, under the new circumstances, said Ren, adding that Beijing hopes to work together with Washington to promote bilateral trade.
Both countries have been engaged in a near two-year long trade war with tit-for-tat tariffs on each other’s goods, before negotiators called a truce with an interim trade deal in January.
Source: Reuters
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06/03/2019
BEIJING (Reuters) – China’s exports likely contracted in February after a surprise bounce in January, while imports fell for a third straight month, a Reuters poll showed, heightening anxiety over whether Washington and Beijing can resolve deep differences over trade.
China’s exports in February are expected to have fallen 4.8 percent from a year earlier, according to the median estimate of 32 economists in a Reuters poll, following a 9.1 percent rise in January.
Such a drop would be the biggest since December 2016, and suggest a further weakening in global demand.
Imports in February are expected to have fallen 1.4 percent from a year earlier, compared with the previous month’s 1.5 percent decline.Stronger-than-expected imports could prompt some China watchers to say the economy is showing signs of bottoming out in response to a string of stimulus measures in 2018.
But most analysts typically caution that China’s data early in the year can be highly distorted by the timing of the Lunar New Year holidays, when some business rush out shipments or scale back output before shutting for a extended break. As such, analysts’ estimates for February varied widely.
TRADE DEAL NOT A SILVER BULLET
In recent weeks, the United States and China appear to have moved closer to a trade deal that would roll back tit-for-tat tariffs on each others’ goods, with Beijing making pledges on structural economic changes, a source briefed on negotiations said on Sunday.
But President Donald Trump will reject any pact that is not perfect, Secretary of State Mike Pompeo said this week.
Even if concrete steps such as dismantling tariffs are agreed, it would not be a panacea for all of China’s economic woes. Its exporters would have to piece supply chains back together, win back market share and contend with slowing demand globally.
Factory surveys have suggested exports and imports will remain weak in coming months, with February’s official gauge showing export orders fell to their weakest level since the global financial crisis.
China’s overall trade surplus is seen to have shrunk sharply to $26.38 billion in February from $39.16 billion the previous month, according to the Reuters poll.
In response to growing domestic and global pressure, China’s government this week unveiled a 2019 economic growth target of 6.0-6.5 percent, down from an actual 6.6 percent in 2018, the slowest pace in nearly 30 years.
China to slash taxes, boost lending to prop up slowing economy
Premier Li Keqiang told parliament on Tuesday that China will shore up the economy through billions of dollars in additional tax cuts and infrastructure spending, and will lower real interest rates.
“A set of pro-growth measures are planned despite positive progress in U.S.-China trade talks, which makes us think that either China doesn’t have full confidence in a trade truce or that the damages from the trade conflict cannot easily be undone,” said Iris Pang, Greater China economist at ING.
Source: Reuters
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