Asian woes to affect Chinese exports
Asian woes to affect Chinese exports
BEIJING (Reuters): Weaker currencies in Southeast Asia and
rising trade friction are likely to dampen China's exports in
1998, Chinese Trade Minister Wu Yi was quoted on Tuesday as
saying.
"Compared with 1997, China's imports, exports and the use of
foreign capital will face greater challenges next year," she said
in an interview with the official People's Daily.
While currencies in Southeast Asian countries such as
Thailand, Indonesia and Malaysia have tumbled in a regional
financial crisis this year, China's yuan is facing upward
pressure from a surging trade surplus and a steady inflow of
foreign funds.
China has ruled out a devaluation of the yuan to support its
exports or attract foreign investment. Despite strong export
growth and steady inflows of foreign investment this year, alarm
bells are ringing in Beijing due to the currency crisis.
"The composition and the markets of goods exported by China
and Southeast Asian nations are identical, so the financial
disturbance will reduce the competitiveness of our exports," Wu
was quoted as saying.
Many currencies in Southeast Asia have depreciated sharply in
recent months, putting downward pressure on units in the region
which have not fallen in value.
Wu also saw trade trouble for China in the form of rising
international protectionism which has prompted "increasing anti-
dumping charges and non-tariff barriers that are targeting
Chinese exports", she said.
Friction with China's key trade partners has worsened because
of its surging trade surplus in recent years, she said.
China registered a trade surplus of $40.23 billion in the first
11 months of 1997, a huge surge over the $13.93 billion in the
same period last year.
"The problem of imbalance does exist in bilateral trade
between China and the United States," Wu Yi said.
China's trade surplus with the United States is expected to
hit $50 billion this year and Beijing officials have said they
were concerned over the imbalance.
Economists have said any devaluation of the yuan would further
aggravate trade friction with the United States.
Wu said Washington has "overestimated" China's exports to the
United States and "underestimated" U.S. exports to China because
of different calculations on entrepot trade through a third
country or region, mainly Hong Kong.
"The Chinese side hopes to see rising exports by the United
States to China," she said.
"At the same time, we hope that the United States will ease
restrictions on its exports to China," she said, referring to
U.S. controls on high technology and nuclear equipment.
In October, China sent its biggest ever trade mission to the
United States ahead of a visit to Washington by President Jiang
Zemin that aimed to soothe U.S. anger over the trade imbalance.