Minister says trade figures to be worse than January's

PUBLISHED : Wednesday, 04 March, 2009, 12:00am
UPDATED : Wednesday, 04 March, 2009, 12:00am

The mainland's exports and imports declined further last month after a terrible January.

The trade figures, which have not been officially released, would be weaker than January's, commerce minister Chen Deming said yesterday on the sidelines of a meeting of the Chinese People's Political Consultative Conference.

Mainland trade with the world took a turn for the worse in January, with exports falling 17.5 per cent year on year to US$90.45 billion, much steeper than the 2.8 per cent decline for December. Imports slumped 43.1 per cent to US$51.34 billion, indicating slackening industrial demand.

The magnitude of the declines surprised many economists. Some blamed the drop on fewer working days in January because of the Lunar New Year holiday, which fell in February last year.

'In February, the trade figures will lag behind,' said Mr Chen, without providing the numbers. He said the mainland would keep yuan exchange rate stable instead of seeking a depreciation against the US dollar to help beleaguered exporters.

Mr Chen did not rule out the possibility that the country would adopt some trade protection measures but said it would resist out-and-out protectionism.

'Trade protection does not equal protectionism. Some measures are allowed under the [World Trade Organisation] framework,' he said.

Beijing has raised export tax rebates since the end of last year to help struggling industries ranging from textiles, household appliances, furniture and leather to food. It has said it would not include a 'buy China' policy in its stimulus schemes even though trade protectionism was emerging elsewhere in the world.

'The financial crisis has not bottomed out. Economic recovery needs world co-operation,' said Mr Chen. He led a 200-member group of mainland businesspeople and officials on a buying mission to Switzerland, German, Britain and Spain last week, signing deals worth US$15 billion.

The mainland will send another group to Europe this weekend to seek merger and investment opportunities.

'The trip will involve tens of entrepreneurs going to the four European nations to invest in the processing, engine, electronics and machinery sectors,' said Mr Chen.

'This trip is to fulfil a promise made by Premier Wen Jiabao earlier to go back to the four nations. Our next step is to consider doing similar trips to northern Europe and eastern Europe,' he said.

In a bid to satisfy business interests and seek political benefits by wielding a bigger influence in the world, Beijing has been encouraging companies to make outbound investments to acquire mineral resources, shift labour-intensive industries and make use of the country's nearly US$2 trillion in foreign exchange.

The mainland's major companies are largely flush with cash.

Last month, the country signed multibillion-dollar deals to obtain oil from Russia, Venezuela and Brazil. The mainland's biggest aluminium producer, Chinalco, also agreed to invest US$19.5 billion in Anglo-Australian miner Rio Tinto Group.