China trade likely strong in remainder of year, says commerce ministry

But commerce ministry reckons Beijing's annual trade target may be missed for a second year

PUBLISHED : Saturday, 24 August, 2013, 12:00am
UPDATED : Saturday, 24 August, 2013, 5:30am

Chinese trade growth is likely to rebound further over the remainder of the year after a bounce in July, the Ministry of Commerce forecast yesterday, even as it warned that the economy might fail to achieve its government-set target for trade growth.

"Global demand has been improving steadily. This, along with further implementation of a series of steps rolled out by the State Council to facilitate trade, is likely to help the growth of exports and imports to stabilise further in the second half," ministry spokesman Shen Danyang told reporters in Beijing.

Global demand has been improving steadily. This, along with further implementation of a series of steps rolled out by the State Council to facilitate trade, is likely to help the growth of exports and imports to stabilise further in the second half
Commerce ministry spokesman Shen Danyang 

Trade in August was expected to maintain its "relatively good" trend after the rebound in July, driven by a pick-up in domestic demand and a gradual recovery in the world economy, he said.

China's exports rose 5.1 per cent year on year in July, reversing a 3.1 per cent year-on-year decline in June. Imports grew 10.9 per cent, compared with a 0.7 per cent fall in the previous month.

But Shen warned against being optimistic, saying that the economy might miss its annual trade growth target for a second year.

The country's 8 per cent growth target for trade set earlier this year was "merely a forecast rather than a binding task", because the goal had not been included in the government's work report submitted to lawmakers' annual congress in March, he said.

Last year, China's economy recorded its worst trade performance since the 2009 global financial crisis as external demand faltered, with combined exports and imports growing 6.2 per cent, missing the government's 10 per cent growth target.

"We have to stay clear-minded," Shen said. "The strength of the world's economic recovery remains relatively weak and uncertainties remain. China's trade development faces many risks and challenges," he said.

Separately, he said foreign direct investment into China in July rose 24 per cent year on year to US$9.4 billion, helping January-July FDI rise 7 per cent. FDI rose 20 per cent year on year in June.

Shen said the sharp gain in FDI was partly due to a low comparison base in July last year. He added it was helped by one-off factors, including some large investments by foreign enterprises over the past two months, he said.

"Short-term fluctuations in FDI figures are normal. It's not right to judge the general trend on one or two months' data," Shen added.

Beijing said earlier it would support economic growth by cutting red tape and easing tax burdens on smaller firms.