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| Speed up the Strategic Transformation of Foreign Trade--- Address at the 8th China Import & Export Enterprises Annual Meeting |
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Vice Commerce Minister: Fu Ziying
(January 21, 2010)
Ladies and Gentlemen:
Good afternoon!
The China Import & Export Enterprise Annual Meeting has gathered us here once again. Since 2002, seven Import & Export Enterprise annual meetings have been successfully held by the Chinese Academy of International Trade and Economic Cooperation of the Ministry of Commerce. This is a platform to share gains, exchange experience, and discuss development strategies for enterprises, academic institutions and the government. I would like, on behalf of the Ministry of Commerce, to express our heartfelt congratulations to the success opening of this Annual Meeting.
The year 2009 was extremely eventful in the history of China’s foreign trade, also the hardest year for import and export since the implementation of reform and opening up policy. Facing with the severe impact of the rare international financial crisis, the CPC Central Committee and the State Council timely made a series policy measures to stabilize foreign needs; local governments and agencies jointed efforts to optimize the environment for foreign trade development; foreign trade enterprises confronted the difficulties and seized opportunities in the crisis. China’s foreign trade volume in 2009 decreased 13.9%, and export volume down 16%. Though no increase in foreign trade, the aim to stabilize market and the market share was realized; though the absolute scale of foreign trade decreased, the relative quota increased. China’s export in 2009 is likely to excess that of Germany to rank first in the world; and the total trade volume is also likely to excess that of Germany to rank second in the world. Despite that the figures decreased by a large margin compared with that of previous years of China, compared with other countries in this year, China is still one of the countries with best performance. The global trade volume of last year is expected to drop by 12%, while China’s export volume of last year dropped by 10.5%, and import volume increased by 1.5%.
Now, I would like to share my views with you in the following three aspects.
I. The basic situation of foreign trade development
The environment for foreign trade development of China in 2010 has been improved compared with last year. However, the uncertain factors increased, and the external situation is still extremely complicated. To cope with the severe economic recession caused by the international financial crisis, all the countries in the world adopted unprecedented financial rescue and economic stimulus measures. As a result, the confidence of international financial market is raised, the function of the financial system of the developed countries is recovered, the stock market rebounded, real estate market is becoming stable, and industrial production show signs of recovery. The economy of some developing countries is again on the rise, domestic need continues expanding, industrial production accelerates growth, and international capital begins reflow. In the third quarter of last year, the annualized rate of the GDP of the US increased by 2.2%, up by 2.9 percentage points compared with the second quarter; that of EU increased by 0.8%, up by 2.1 percentage points; the increase rates of such emerging economies as India, Vietnam, Indonesia also accelerates. International trade and international investment begins vigorously, especially due to that the domestic needs within the emerging economies have spurred the international trade. As the policies on finance-stabilizing and economic growth stimulating have shown further effects, if without any big turbulence in the international financial community, it’s expected that the world economic situation will be better than last year, some developed countries will end the economic recession, and the emerging economies may do better than the developed countries. According to the predictions of some relative international agency, the world economic growth of 2010 will increase by 3.1% while that of last year decreased by 1.1%; the international FDI will increase by over 15% while that of last year decreased by 30%. In spite of the good sign of the world economy, the recovery process will be slow and full of twists. With many uncertainties, China’s foreign trade development will still be confronted with difficulties and challenges.
Firstly, the foundation for world economy to recover is not stable, and foreign needs can not increase significantly. The economic recovery of most countries is the result of powerful stimulus policies. However, the citizens have weak consumption willingness, and enterprises have conducted less investment; the utilization of production capacity is still low, and the economy has less internal drive. The unemployment rate of European counties and the US has risen to about 10%, and that of Japan hit the record high since this decade. According to the forecast of IMF, the global commodity trade volume only increased 2.7%, which is much lower than the increase rate before the financial crisis, and lower than the expectation to the growth rate of world economy.
Secondly, big risks remain in international financial community, and the exchange rate and oil price may fluctuate severely.
Thirdly, market competition is tenser, and trade protectionism has picked up.
China’s foreign trade showed some recovery signs in the second half of last year, but there is still a big margin compared with that before the crisis. Based on the complex and unstable external situation and domestic development requirements, the focus of our foreign trade development is “maintain percentage, adjust structure, and boost balance”. To maintain the percentage is to stabilize and enlarge the percentage in the international market; to adjust structure is to optimize import & export product structure and market structure, so as to increase product competitiveness; to boost balance is to boost the balanced development of both import and export. Therefore, China will keep the continuity and stability of foreign trade policies.
II. The pressure China facing during the post-crisis era
The financial crisis must have great impact on the global economic pattern. For China’s foreign trade, there are new opportunities brought by the global industrial realignment and regrouping, and the pressure due to the outer market competition and domestic structural adjustment.
The first is the pressure to foster new growth point.
The Second is the pressure from international competition. It mainly includes the following three aspects: 1. The pressure of the total foreign needs; 2. The pressure from the developed countries; 3. The pressure from the developing countries. The direct reflection of the tenser international competitive pressure is the frequent trade frictions. China is likely to confront more serious trade friction situation in the post-crisis ear.
The third is the pressure from the price rising of domestic elements. The competitive power of China’s export is mainly the price competitiveness.
III. Speed up the strategic transformation of our foreign trade
During the last three decades, the reasons for the rapid development of our foreign trade may be the following two points: firstly, the foreign trade has been based on China’s national conditions and the needs of the special period; secondly, to be able to adapt to the international situation, and grasp the opportunities outside China. In the coming period, great changes will occur in the international and domestic conditions, which require us to speed up the strategic transformation of our foreign trade development, while maintaining the status of trade power.
The first transformation is from the scale and speed to quality and benefits. The main aspects are economic benefits and social benefits.
The second transformation is from outer drive to inner drive. That is the change from relying on the input of foreign capital and foreign industries to pull foreign trade, to fostering domestic industries to gradually become the backbone of China’s import and export, so as to lower the outer dependence for foreign trade growth. The three main measures are as follows: 1. To foster national trade bodies; 2. To intensify the foundation of self-industries; 3. To form own trade network.
The third transformation is from the market width to market depth. The three main measures are as follows: 1. Through the brand effect to expend market depth; 2. Through quality improvement to expend market depth; 3. Through investment to expend market depth.
The fourth transformation is from the low end elements to top elements. The three main measures are as follows: 1. To foster new advantages in scientific competition; 2. To speed up the transformation and update of process trade; 3. To vigorously develop service trade.
The strategic transformation of China’s foreign trade is a big subject worth in–depth research and discussion. I just brought up it and expect more exchanges and discussions. Those who attended this annual meeting include government officials and experts, entrepreneurs from the business circle; domestic scholars, as well as overseas experts; from the in industrial community, as well as high-level financial sector. It is hoped that through the collision of theory and practice, combination of short-term issues and strategic issues, all of you may about government to formulate policies and enterprises.
May the annual meeting succeed!
Thank you!
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