FEWER BUYERS: A foreign businessman negotiates with an exporter during the 112th Canton Fair. Business declines at the fair indicated gloomy foreign trade prospects for China (CHEN YEHUA)
The 112th China Import and Export Fair—commonly referred to as the Canton Fair—concluded on November 4, with an air of pessimism.
According to statistics released by the China Chamber of Commerce for Import and Export of Light Industrial Products and Arts-Crafts, the total transaction volume for light industrial products declined by 7.67 percent compared to the previous fair, and those for other products, such as machinery and electric products, textiles and apparel, also declined.
The Ministry of Commerce (MOFCOM) on October 26 released its Report on Chinese Foreign Trade Development (Autumn 2012), which showed that China's foreign trade volume only rose by 6.2 percent in the first three quarters this year compared with the same period last year, and is unlikely to reach the goal of 10-percent
annual growth set by the Chinese Government at the start of the year.
The export-driven growth model that China has relied on has gradually weakened in the last five years since the outbreak of the global financial crisis.
In a downturn
The global economic recession explains China's lackluster foreign trade performance, according to the Report on Chinese Foreign Trade Development.
This year has seen the ongoing global financial crisis continuing to impact the world economy as the European sovereign debt crisis deepens, world economic recovery slows and the demand across the international markets drops.
Zhao Jinping, Deputy Director of the Research Department of Foreign Economic Relations at the Development Research Center of the State Council, says among China's major export destinations, Europe is of highest concern.
In the first three quarters this year, China's exports to Europe dropped by 5.6 percent while exports to the United States grew by 9.6 percent.
However, the United States' role in bolstering China's exports is weakening. From January to June, China's exports to the United States increased by 13.6 percent, but from January to August, export growth dropped to 10.2 percent, and then to 9.6 percent for the January-September period.
As for trade with Japan, Jin Baisong, a researcher with the Chinese Academy of International Trade and Economic Cooperation, says the territorial dispute between the two neighbors has chilled trade relations.
The report also says China is the biggest victim of trade protectionism. In the first three quarters, China was confronted with 55 trade remedy investigations, up by 38 percent and involving $24.3 billion worth of goods, an eight-fold increase year on year. Influenced by trade frictions in several foreign markets, exports of photovoltaic cells were frequently blocked.
According to the report, some countries restrict imports to support local industries and alleviate employment pressure when their economies show no signs of improvement, thereby obstructing normal international trade and investment activities.
The WTO estimates that from October 2011 to May 2012, WTO members had launched 182 new restrictive trade measures, affecting 0.9 percent of the world's imports.
As China's export industries shift from labor-intensive to emerging industries—like green energy—foreign countries are creating more restrictions on China's exports.
The report states that weak overseas demand will increase trade friction on Chinese exports. Confronted with a complex and challenging environment at home and abroad, China should continue to focus on stabilizing growth and promoting trade balance.
The MOFCOM says it will closely track changes in foreign trade and ensure the implementation of various policies and measures.
Meanwhile, it will work to make China more accommodating to imports in an effort to balance trade with other countries.
The report states that the environment at home and abroad for China's foreign trade in 2013 may be slightly better than that of 2012, but restraints still exist.