China may achieve a trade balance 2011.08.23 next year, as weakening demand from the US and the EU will hit exports while imports are set to grow, an official from the country’s top think tank said.
“Next year will be a critical period for China’s trade, as the ongoing debt crisis in the EU and US reduces their demand while yuan appreciation and ever-increasing trade protectionism hit China’s exports,” Wei Jianguo, secretary-general of the China Center for International Economic Exchange, told China Daily on the sidelines of the 7th Beijing-Tokyo Forum. While China’s exports to emerging economies grow rapidly, they account for just one third of those lost to developed economies, Wei, who was also former deputy commerce minister, said.
“With exports declining next year and imports picking up, China may achieve a trade balance,” he said. He forecast China’s trade surplus will decrease to less than US$100 billion for 2011 from last year’s $183 billion. The annual rate of export growth to EU countries, Wei estimated, may even decrease to 10 per cent for 2011. “China’s exports to the EU will grow 13 to 15 per cent at most, as opposed to 22 to 28 per cent last year,” Wei said. He attributed the decline to the ongoing debt crisis plaguing European countries. Currently, the EU is China’s biggest trade partner, followed by the US and Japan. As to the surprise rise in the trade surplus in July, Wei said it was due to predicted yuan appreciation. “Exporters rushed to have the sales orders booked before appreciation,” said Wei. On Aug 11, the yuan went beyond 6.4 to the dollar for the first time in 17 years. The currency is expected to appreciate by 7 per cent this year and another 5 to 7 per cent next year, according to Wei. China’s trade surplus topped $31.5 billion in July, the highest level for two years, according to data released by the General Administration of Customs. China’s trade volume hit $318.9 billion in July, a year-on-year increase of 21.5 per cent while the volume of imports climbed 22.9 per cent year-on-year to $143.6 billion.