Asian crisis weighing on China trade

Asian crisis weighing on China trade

BEIJING (AP): The Asian financial crisis will slash China's export growth rate this year from a projected 10 percent target to as little as 4 percent, an official newspaper reported Sunday.

The "most optimistic" estimate for export growth would be 6 percent, but 4 percent to 5 percent would be "quite satisfying" given the slowdown of world trade, the Business Weekly quoted Qin Xuanren, deputy secretary general of the International Trade Association of China as saying.

The decline in exports has put China's ability to meet its overall economic growth rate target of 8 percent in question. Exports last year surged 20.9 percent to US$182.7 billion from the previous year and contributed to 20.6 percent of 1997's 8.8 percent growth.

Qin predicted China's exports would increase in the fourth quarter to about $54 billion in volume. For the first nine months, China's exports rose 3.9 percent on the year to $134.13 billion.

Chinese government economists continue to predict the 8 percent overall growth target will be met, despite slumping exports.

The Business Weekly said government leaders were sticking to the 8 percent prediction "because they believed confidence was vital in time of difficulties to maintain the momentum of foreign capital influx and avoid public unease."

The government has increased spending on infrastructure construction as a means of generating demand. High growth is necessary for China in order to create jobs for millions of workers laid off as part of the reform of debt-ridden state companies.