Archive for July, 2012

Chinese Exports in June Increased by 11.3%, Achieving a Trade Surplus of $ 31.7 Billion

Posted on July 21, 2012  by Xixi  in General News, Importing from China   No Comments »
Chinese Exports in June Increased by 11.3%, Achieving a Trade Surplus of $ 31.7 Billion

Since the beginning of this year, China’s import and export of trade in goods maintained an overall steady growth, showing a trend of low yet stable growth. According to customs statistics, in the first half of this year, China’s foreign trade import and export value amounts to $ 1,839,8 billion, an year on year increase of 8% (similarly hereafter). Among which the total exports were $ 954.38 billion, an increase of 9.2%; and the imports were 885.46 billion U.S. dollars, an increase of 6.7%; achieving a trade surplus of 68.92 billion U.S. dollars, increasing by 56.4%.

In June, China’s import and export value was $ 328.69 billion, an increase of 9%, among which the export amounted to 1802.1 billion U.S. dollars, up by 11.3 percent; the imports were 148.48 billion U.S. dollars, an increase of 6.3%; a trade surplus of 31.73 billion U.S. dollars, up by 42.9%.

China’s Export In May Amounts to $ 181.1 billion

Posted on July 21, 2012  by Xixi  in General News, Importing from China   No Comments »
China’s Export In May Amounts to $ 181.1 billion

In the first five months this year, China’s import and export value amounts to $ 1.5109 trillion, an increase of 7.7%. Among which the exports were $ 774.4 billion, up by 8.7%; in May, China’s export reached $ 181.1 billion, scoring a record high, with the growth rate rose from 4.9 percent in April to 15.3%.

Why is this strong rebound in China’s export growth? Can this trend be maintained? Several officials of the Ministry of Commerce and Industry experts were interviewed on this topic.

As Market Diversification Began to Show Effects, the Export to the United States and ASEAN Witnessed Swift Growth

Chinese export growth rebounded greatly in May. An important reason for this is the good performance of some of the major export markets. In the first five months, exports to the United States, ASEAN, and Russia were up 14.4%, 14.8% and 15.3% respectively, driving the increase in export by 4.1 percentage points. In May, the United States, ASEAN, and Russia’s increase are 23%, 28.3% and 18.9% respectively.

The Commerce Department official said this may has witnessed a huge increase in exports to the U.S., which is mainly because the U.S. economic recovery is getting better and better. In the first quarter this year, American economic growth ratio of circle year reached 1.9%. The consumer confidence kept on rising month by month, driven by the increased demand for imports. In the meantime, the effect of the strategy of market diversification effect is further demonstrated. Through relying on the support of the China – ASEAN Free Trade Area, export to ASEAN and other emerging market has always maintained a rapid growth, the proportion of China-ASEAN trade is keep on expanding .

Industry experts believe that the rebound in export growth in May in line with market expectations, but more than expected, and seasonal factors also an important reason. Generally the May and the June is the period for centralized delivery, and the completion and delivery of orders stimulated export growth. According to Li Jian, the researcher of the Ministry of Commerce, As this year’s “May Day” holiday arrangements is April 29, April 30, and May 1, which depressed the April data and pushed up the data in May instead. On the other hand, RMB appreciation trend slowed down in May, and the rate of RMB against the U.S. dollar depreciated by 0.9 percent , which is obviously more favorable for export enterprises

As the European debt crisis continues to ferment, the export growth rate of processing trade dropped

Influenced by the weak European economic recovery, although in May our exports to the EU increased by 3.4% , but before May the EU ‘s total exports decreased by 0.8%, among which the exports to Germany , France and Italy decreased by 3.4% , 3% and 25.1% respectively . Meanwhile, export to india slowed down to 1.1 percent, while the export to Taiwan fell by 8.6 percent.

The reason is mainly due to the fermenting European debt crisis , the Greek political instability lead to an increased risk of exit in the euro area , the continuous development of the Spanish banking crisis , EU parties in the crisis Solutions differences increase , resulting in financial markets to a severe shock , investment and consumer demand have been affected. One – quarter of the EU economy , zero growth in the nine member economies into recession .

In addition, since 2011, affected by the tight environment of domestic and international environments, China’s processing trade export growth continued to drop. Among China’s export to Taiwan, the processing trade accounted for 51%. Therefore, the short of power in the processing trade greatly affected our overall export to Taiwan.

According to the official of Ministry of Commerce, in the next period the Ministry will implement the central policies and measures to settle the stability of the foreign trade growth, stabilize the enterprise expectations and boost the confidence of the enterprise. Therefore, the support to the emerging market and trade facilitation could be further improved. Besides, those measures and policies could help the enterprises to tackle the actual problems in operating and managing the enterprises, so as to face with the trade friction.

Exports in the Eastern Area Continued to Slow Down, and the Export of Mechanical and Electrical Products Began to Speed Up

From the regional perspective, in the first five months, the eastern region’s exports grew by only 5.2%, and the trade revenue of Guangdong, Jiangsu, Zhejiang, Shanghai, and Beijing were up by 6.9% , 2% , 5.3% , 3.1% and 4.8% respectively. While in Shandong province the trade turnover declined by 0.5 %. In the mid-west region the exports were up by 25.2% and 56.3% , demonstrating a rapid growth. Among which the export growth in Chongqing and Henan were 2.3 times and 1.1 times respectively, while in Sichuan, Jiangxi and Guangxi, the export growth were 78.7% , 57.2 % and 22.7% respectively.

Why there was such a big difference among the eastern, central and western regions? Official from the Ministry, with the rising costs of domestic labor and other factors, export enterprises, especially the enterprises in the eastern region generally faced with difficulties of a narrowed profit margin and there is also decline in operating efficiency. In the eastern area, the upper level of the minimum wage standard have been more than 1000 yuan/ month , and Zhejiang and Guangdong province have been more than 1300 yuan/ month.

Correspondingly , the central and western regions industrial supporting capacity improved significantly in recent years. The overall costs are relatively low. And the aspiration and propelling power have been on the rise. And the foreign-funded production capacity in the Midwest region has been transferred. Besides, the momentum of the new investment is also significantly enhanced, driven by rapid growth in exports of some parts of the region. 
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Viewing from the product structure, in the first five months, the mechanical and electrical products exports increased by 9.9%, among which machinery and equipment have grown by 12.1%. And the apparel and textile export growth in the doldrums grew by 2.5% and 1.4% respectively. In May, the exports of mechanical and electrical products increased by 14.9%, and the export of traditional labor-intensive products has been on the rise, and lamps, plastic products, furniture, luggage, footwear increased by 98.1% , 62.6% , 56% , 32.2% and 24.6% respectively.

Exports Rebound Help to Release the Economic Pressure, and the Prospect of Export Is Still Unclear

“After experiencing the international financial crisis, China’s export enterprises began to open up external markets and improve innovation capabilities to continuously advance product competitiveness.” Official from the Ministry so said. Some countries began to pay more attention to the real economy and infrastructure, which has also led to increased upstream and downstream industry demand for imports. In the future, the Ministry of Commerce will play an important role in stabilizing foreign trade growth and the transforming mode of foreign trade development. In addition, the ministry will lay emphasis on nurturing new technology, brand, quality and service as the core competitive advantage. And the export product mix could be further optimized, and the quality of export products and added value could be further improved. And the export enterprises should accelerate brand building and driving forward the brand and technology products trade.

Li Jian believes that in the future, the trend of exportation cannot be stabilized. With only one month’s statistics, it is difficult to predict whether the economic performance could be further improved. At present, the recovery of the international economic situation is still very severe, and the U.S. unemployment rate began to rise, besides, the debt crisis in Europe is still uncertain. And the operating pressure of the domestic export is still hard to be significantly alleviated. In addition, as the exchange rate and labor cost is still on the rise, enterprises still find it difficult to do financing. Therefore, more efforts are still needed in order to realize annual foreign trade growth of 10%.

According to the research report recently released by the Gao Hua Securities, the favorable trade statistics in May tend to lead people to easing the concerns over whether the economic growth would further slow down. However, the trade statistics in a single month tends to experience many fluctuations. Therefore, it is better to be prudent over the future. The report argues that China’s central bank issued a clear signal that “although the trade data is better than expected and the industrial added value and fixed asset investment data is slightly improved, the overall growth is still sluggish, therefore, the policies still need room for relaxation.”

CHINA–ASEAN FREE TRADE AREA

Posted on July 12, 2012  by Xixi  in Glossary, Knowledge   4 Comments »
CHINA–ASEAN FREE TRADE AREA

China – ASEAN Free Trade Area?abbr. CAFTA?, is a free trade zone established among China and 10 ASEAN countries. On January 1, 2010, the Free Trade Area officially initiated. Since its establishment, the trade between ASEAN and China accounted for 13% of world trade, becoming a huge economic power covering 11 countries, boasting 1.9 billion populations and a GDP of $ 6000 billion. At present the CAFTA is not only the world’s most populous free trade area, but also the largest one among developing countries.

Since 2002 when China and ASEAN signed the basic documents of the Free Trade Area, the parties have gradually reduced or exempted tariffs. As a result, a unified market consists of 11 countries is gradually taking shape.

Early Harvest Program

“Early Harvest Program ” is an integral part in building the China – ASEAN Free Trade Area, the aim of which is to bring benefits to the consumers in this area in a timely manner. According to the “Early Harvest Program”, from January 1, 2004, the tariff will be reduced in more than 500 kinds of products. And in 2006, the tariff on these products will be totally exemplified.

These products are mainly agricultural products listed in the “Customs Tariff “from the Chapter I to Chapter VIII, with some listed in other chapters. And these products are: live animals, meat and edible meat offal, fish, dairy and other animal products, live trees, edible vegetables, fruits and nuts. In some countries, coconut oil, palm oil, vegetable oil, etc. are also included in the “Early Harvest Program”. In October 1, 2003, China and Thailand took the first step in initiating the program.

According to the time frame of the CAFTA Early Harvest Program, China and six ASEAN countries’ (Malaysia, Singapore, Indonesia, Philippines, Thailand, and Brunei) tariff reduction and exemption schedule is as follows: products whose MFN tariff rates are higher than 15% would be reduced to 10% by January 2004, 5% by January 2005, and 0% by January 2006. All products with MFN tariff rates between 5-15% would be reduced to 5% by January 2004, and 0% by January 2005, and products whose MFN tariff rates are lower than 5%would be exempted by January 2004.

In new ASEAN member countries (Vietnam, Laos, Myanmar, Cambodia), all products whose MFN tariff rates are above 30% (inclusive) would be reduced to 20% and a further 5% would be reduced with each passing year and by 2009 the rates would be totally exempted( 2010 for Cambodia).  All products whose MFN tariff rates are between 15% (inclusive) and 30 %( not included) would be reduced to 10% in Vietnam by January 2004, 5% by January 2006 and 0% by 2008, as for other new ASEAN member countries, 10% by 2006 and 5% by 2008. When it comes to the products whose MFN tariff rates are below 15%, the rates would be reduced to 5% by January 2004 and 0% by January 2006, as for other new ASEAN member countries, 5% by 2006 and 0% by 2008.

Opening Schedule for Trade in Goods

On July 20, 2005, China – ASEAN free trade area tariff reduction process was officially initiated, which marks the “Trade in Goods Agreement ” has officially entered the implementation phase, also marks the construction of China – ASEAN free trade zone has officially initiated. The Trade in Goods Agreement provides that in addition to the early harvest products (mainly agricultural products ), and the rest of the products are classified into two categories?normal products and sensitive products.

Opening Schedule for Trade in Service

In January 2007, China and ASEAN signed a free trade zone Trade in Services Agreement, which was implemented from July 2007. Countries should list their specific opening commitments in the form of schedules of concessions. The specific commitments of countries are a higher level of liberalization commitments made on the basis of their respective WTO General Trade in Services Agreement Commitment.

The main content of China’s specific commitments: China’s commitment covers the construction, environmental protection, transportation, sports and business services (including computer, management consulting, market research, etc.), and 26 sub-sectors of the five service sectors. The commitment includes further opening part of service sectors, allowing the establishment of wholly-owned enterprises, relaxation of the foreign equity limit and the national treatment.

In accordance with the provisions of the progressive liberalization, the bidding above acting as the first batch of market access commitments schedule would be signed together with trade in services agreement. At present, the two parties are under negotiation for the second batch of market access. After negotiations, a Protocol would be signed to include the second batch of schedules of concessions into the Trade in Service Agreement. Meanwhile, in accordance with the deliberation provision, in the future the two parties could carry out negotiations on the further opening up in the service trade, so as to gradually bring the trade in service into a free state.