Thursday, March 6, 2014, 08:38
Nation to see higher quality, lower growth in trade
By Li Jiabao

China lowered its annual target of trade growth to 7.5 percent in 2014 after the world's second-largest economy became the leading goods trader last year.

Meanwhile, the government has shifted its focus to improving the country's trade quality and boosting its exports amid a climate of rising costs at home and new rules coming from regional trade agreements.

"We will make it a strategic priority to upgrade exports and promote the balanced growth of foreign trade," Premier Li Keqiang said when delivering a government work report on Wednesday.

He added that total imports and exports are projected to grow at about 7.5 percent this year.

"We will keep export policies stable, accelerate reform to facilitate customs clearance and extend trials of cross-border e-commerce," said Li, adding that "We will implement policies to encourage imports and import more products in short supply in China."

Other goals include supporting businesses in "creating Chinese brands" and developing international marketing networks, he said.

"We will encourage the export of complete sets of large equipment" for telecommunications, railways and power stations "and enhance the international reputation of Chinese equipment", the premier said.

In 2013, China's combined imports and exports rose 7.6 percent to $4.16 trillion, replacing the United States to become the world's biggest trader in merchandise for the first time, according to the Ministry of Commerce.

But the growth pace fell behind the 8 percent target outlined by the government early last year.

Foreign trade in 2012, with year-on-year growth of 6.2 percent, missed the 10 percent growth target for that year. But China's foreign trade maintained double-digit expansion in past decades except for financial crisis-hit 2009.

"We have to be especially clear that the traditional advantages supporting China's fast trade expansion in past decades are changing fundamentally," said Long Guoqiang, a researcher at the Development Research Center of the State Council.

"Rising costs at home and changing environments abroad force us to restructure our strategy and enhance China's position in global value chains," Long added.

Zhu Haibin, chief China economist at JPMorgan Chase & Co, projected China's exports this year to rise to about 11 percent, compared with 7.9 percent in 2013, driven by growth in developed economies despite rising production costs, yuan appreciation and relatively weak demand in emerging markets.

"However, structurally, the general rise in production costs remains the key challenge for China's export and manufacturing sectors," Zhu said in a note.

Despite its lowered trade growth target, China's non-financial foreign direct investment is expected to rise by 3.5 percent to $121.7 billion in 2014, the National Development and Reform Commission said in its annual report to the legislature on Wednesday.

China will expand market access for foreign investors and deepen reforms of the FDI regulation system, according to the NDRC report.

The premier said the government will strive to make progress in negotiations on agreements concerning trade in services, government procurement and information technology, while speeding up negotiations on new areas such as environmental protection and e-commerce.

"We will actively participate in developing high-standard free trade areas; continue negotiations on investment agreements with the United States and the European Union and accelerate free trade areas, negotiations with the Republic of Korea, Australia and the Gulf Cooperation Council," Li said.

"We will continue to promote trade and investment liberalization and facilitation, strive for mutual benefits with other countries and ensure that opening-up reinforces and is reinforced by reform and development," the premier concluded.